Payments on account ― income tax

Payments on account are required where:

1. •

   the amount payable at the end of the previous year was more than £1,000, and

2. •

   the amount collected at source was less than 80% of the total tax liability

TMA 1970, s 59A(1); SI 1996/1654

Each payment on account is 50% of the previous tax year’s tax liability, less the tax collected at source.

Payments on account do not cover capital gains tax as capital gains are unlikely to remain at the same level year on year; whereas