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Top tips to keep cool over your Summer tax bill

Top tips to keep cool over your Summer tax bill

While January's self-assessment tax return date is firmly etched in the minds of most professionals, HMRC's summer tax lability deadline of 31 July can often go unnoticed despite being as equally important. Paying the due amount can pose cash flow challenges for some, particularly for newly self-employed workers who could be facing a large bill in a few weeks' time.

The following top five tips highlight how you can ease the pressure ahead of the July deadline and avoid any unexpected surprises.

Understand Payment on Account - anyone with a self-assessment bill of more than £1,000 is required to make payment on accounts, which are essentially a means of paying some of your tax bill in advance. In addition to the 2017/18 liability that you paid by 31 January 2019, you were also required to pay half of your total expected 2018/19 tax bill by the same deadline. Some self-employed workers therefore typically face a tax bill which is roughly 50% higher than they had been anticipating and sometimes forget that the second instalment of their liability is now due on 31 July 2019.

Claim everything you're entitled to - some professionals end up paying more tax by failing to claim all of the tax-deductible expenses they are entitled to. If you are self-employed, you can claim tax allowances on expenses including professional membership fees and subscriptions, specialist equipment, as well as sales and marketing promotional materials. In addition, you can claim business mileage or fuel, excluding commuting to your normal place of work.

Don't try and pay by credit card - previously up to 800,000 people paid their tax bill by credit card until HMRC withdrew this facility together with those of digital services, such as PayPal and Apple Pay, from January 2018. This was due to a new EU directive, known as Payment Services Directive 2 regulations, which bans all organisations and companies from levying additional commission charges to process payments imposed by credit card companies. If you think you might need to spread your payments over time, try looking at alternative finance providers who can provide you with this facility.

Consider applying for a short-term business loan - paying a significant tax bill in one lump sum can place a strain on your finances so spreading the cost could be a more attractive option. Alternative finance providers, such as Wesleyan Bank, offer flexible funding solutions for tax bills to enable professionals to preserve cash flow without compromising their existing banking lines. Unsecured loan facilities allow you to pay your liability over a term of six or 12 months to provide peace of mind that your bill is being covered on time.

Try tax funding the easy way - To get an instant quote to spread the cost of your tax bill, visit our online portal. Alternatively, please contact the Wesleyan Bank team at or call 0800 980 9348.

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