The second payment on account (POA) of income tax and Class 4 National Insurance liabilities for 2006/07 is due on 31 July. These payments generally need to be made by individuals within the self assessment system whose liabilities are not covered by tax deduction at source. The system of tax deduction at source includes tax deductions through PAYE, for current or previous year’s liabilities, or tax deductions by banks and building societies.

The POA is based on the taxpayer’s liability for the previous tax year but can, in some cases, be reduced if the taxpayer’s circumstances have changed and their liability for 2006/07 is likely to be significantly lower than it was in 2005/06. If you believe you may be able to reduce your POA do get in touch.

If you need to make a POA you should have received a statement from HMRC advising you of what you need to pay. Unfortunately due to an HMRC computer problem you may have received two statements, the second of which was issued to clarify the breakdown of any under or overpayments brought forward. The payslip should show the correct amount that is payable. Just pay it once!

If you have not already made your payment you need to do so by 31 July to avoid interest being automatically added to your liability.

Internet link:

HMRC POA problems