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Income Tax: Self-employed

Question for Treasury

UIN HL12076, tabled on 12 January 2021

To ask Her Majesty's Government what steps they are taking to ensure that self–employed individuals do not overpay income tax.

Answered on

26 January 2021

Self-employed individuals determine the amount of tax due for the previous tax year by submitting their Self-Assessment (SA) tax return.

The amount due to be paid by 31 January is the tax due per the return less any payments already made for that tax year plus the first payment on account (POA) of the individual’s tax bill for the current year. Each POA is half of the previous year’s tax bill.

The POAs due for the 20/21 tax year will be based on the liability for the 2019/20 tax year, a year largely unaffected by COVID, but individuals can apply to reduce those payments on account if they think they are too high based on their current circumstances. If they wish to do so, they can apply to HMRC by using form SA303. This can be done online through the Government Gateway or by post.

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