Personal Tax - When is Income Tax and Capital Gains Tax Payable?

At McDade Roberts we process hundreds of tax returns for our clients. Our clients tell us it takes one stress out of their year. Below is some information to help you keep up to date with what you need to know about when to pay income and capital gains tax as that is one job we don't do for you!

Under the self assessment regime an individual is responsible for ensuring that their tax liability is calculated and any tax owing is paid on time.

When To Pay Tax

The UK income tax system requires the payer of certain sources of income to deduct tax at source which removes the need for many taxpayers to submit a tax return or make additional payments. This applies in particular to employment income. Interest is now received gross of tax but the savings allowance removes most taxpayers from the need to pay tax on such income. However deduction of tax at source is not possible for the self employed or if someone with substantial investment income.

The instalments consist of two payments on account of equal amounts:

  • the first on 31 January during the tax year and
  • the second on 31 July following.

These are set by reference to the previous year's net income tax liability.

A final payment (or repayment) is due on 31 January following the tax year.

In calculating the level of instalments any tax attributable to capital gains is ignored. All capital gains tax is paid as part of the final payment due on 31 January following the end of the tax year.

A statement of account similar to a credit card statement is sent to the taxpayer periodically which summarises the payments required and the payments made.


Sally's income tax liability for 2019/20 (after tax deducted at source) is £8,000. Her liability for 2020/21 is £10,500. Payments for 2020/21 will be:



31.1.2021 First instalment (50% of 2019/20 liability)


31.7.2021 Second instalment (50% of 2019/20 liability)


31.1.2022 Final payment (2020/21 liability less sums already paid)




There will also be a payment on 31 January 2022 of £5,250, the first instalment of the 2021/22 tax year (50% of the 2020/21 liability).

COVID-19 Tax Payment Dates

Due to COVID-19 payments due on 31 July 2020 may be deferred until 31 January 2021. This is an automatic offer with no applications required and no penalties or interest for late payment will be charged.

Late Payment Penalties and Interest

Using the late payment penalties HMRC may charge the following penalties if tax is paid late:

  • A 5% penalty if the tax due on the 31 January 2021 is not paid within 30 days (the 'penalty date' is the day following)
  • A further 5% penalty if the tax due on 31 January 2021 is not paid within 5 months after the penalty date
  • Additionally, there will be a third 5% penalty if the tax due on 31 January 2021 is not paid within 11 months after the penalty date.

These penalties are additional to the interest that is charged on all outstanding amounts, including unpaid penalties, until payment is received.

Nil Payments on Account

In certain circumstances the two payments on account will be set at nil. This applies if either:

  • income tax (and NIC) liability for the preceding year - net of tax deducted at source and tax credit on dividends - is less than £1,000 in total or
  • more than 80% of the income tax (and NIC) liability for the preceding year was met by deduction of tax at source and from tax credits on dividends.

Claim to Reduce Payments on Account

If it is anticipated that the current year's tax liability will be lower than the previous year's, a claim can be made to reduce the payments on account.

How McDade Roberts Can Help

Our friendly team at McDade Roberts can prepare your tax return on your behalf and advise on the appropriate payments on account to make. We can advise you whether a claim to reduce payments on account should be made and to what amount. Please do contact us for help.