Need help with UK self assessment payment on account - can I cancel?

I've got my second payment on account coming up in July 2022 for my UK self assessment tax return, but I'm pretty sure I won't need to pay it. My income for 2021-2022 ended up being way lower than expected and falls below all the tax thresholds. I'm wondering if there's a way to cancel this second payment since it seems unnecessary? I had to make the first payment because my previous year's income was higher, but this year has been really different financially. Do I just not pay it and wait for HMRC to sort it out, or is there a formal process to cancel the payment before the due date? I'd rather not have money sitting with HMRC that I could use for other things right now. Anyone dealt with this before?

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18 comments

Keisha Robinson

•8M

Yes, you can definitely cancel your second payment on account if your income has dropped below the tax thresholds. You don't need to wait and pay money unnecessarily. The formal process is to complete form SA303 "Self Assessment - Claim to reduce payments on account" or you can do it online through your HMRC online account. Just log in, go to the self assessment section and look for the option to reduce your payments on account. You'll need to provide an estimate of your actual income/tax for the year to justify the reduction. Since you mentioned your income is below all thresholds, you can likely reduce the payment to zero. Just be careful to provide an accurate estimate - if you underestimate significantly, HMRC might charge interest on any underpayment.

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Keisha Robinson

•8M

You can actually submit the SA303 form anytime before you make the payment. There's no formal deadline for it, but obviously you'll want to do it before July when the payment would be due. I'd recommend doing it as soon as possible to make sure it's processed in time. If you're doing it online, the changes usually apply quite quickly to your account. If you're posting the paper form, allow at least 2-3 weeks for processing. Either way, you'll receive confirmation once it's been processed.

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Paolo Conti

•8M

I went through something similar last year! My accountant had me pay too much for my first payment on account, then I discovered taxr.ai (https://taxr.ai) when I was searching for help with my self assessment. It was honestly a game-changer for figuring out exactly how to handle my payments on account situation. The tool analyzed my income details and confirmed I could reduce my second payment. It walked me through the process on the HMRC portal step by step - way clearer than the official guidance. It also keeps track of upcoming deadlines so you don't miss anything important.

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Paolo Conti

•8M

It's specifically designed to handle UK taxes including self assessment, so it's very accurate for our tax system. The guidance is tailored to HMRC's requirements and it stays updated with the latest UK tax rules. For calculating reduction amounts, it actually does the calculations based on your current year's income and explains exactly how much you can safely reduce your payment to. It shows you the math behind the recommendation so you understand why it's suggesting a particular amount. This really helped my confidence when submitting my reduction request to HMRC.

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GalaxyGazer

•8M

Just wanted to update after trying taxr.ai from the recommendation above. I was skeptical at first since I've been burned by tax tools before, but it was actually super helpful! I uploaded my income documents and it confirmed I could reduce my second payment on account to zero. The step-by-step guide for completing the reduction request through my HMRC account was crystal clear - even showed screenshots of where to click. HMRC processed my request in about a week and my online account now shows £0 due for July. Such a relief not having that money tied up! Definitely recommend for anyone dealing with payments on account issues.

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Oliver Wagner

•8M

If you're having trouble getting through to HMRC to confirm this (their phone lines are absolutely dreadful), I'd recommend Claimyr (https://claimyr.com). I wasted HOURS trying to speak to someone at HMRC about my payment on account situation last year. Claimyr basically calls HMRC for you and when they get through to a human, they connect you to the call. Saved me from listening to that awful hold music for ages. You can see how it works here: https://youtu.be/_kiP6q8DX5c I needed specific clarification about my payment reduction that wasn't clear from the online guidance, and getting through to an actual HMRC advisor made all the difference.

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Oliver Wagner

•8M

In my experience, they got through in about 20 minutes when I had been trying unsuccessfully for days. They use some clever system that keeps dialing and navigating the phone tree until they get a human. They don't do anything magical - they just have the patience and technology to keep trying all the different options until they get through. It's basically what you'd do yourself if you had unlimited time and patience to keep calling back. The real value is that you don't have to listen to the hold music or keep redialing - they only connect you once there's an actual person on the line.

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Javier Mendoza

•8M

Well I'm eating my words about Claimyr! After posting my skeptical comment, I decided to try it anyway since I needed to sort out my payment on account situation urgently. It actually worked exactly as described. I submitted my request at around 9am, and about 25 minutes later got a call connecting me directly to an HMRC advisor - no hold music, no automated menus, just straight to a human! The advisor confirmed I could reduce my payment to zero and helped me understand exactly what to put on the form. Saved me hours of frustration and probably preserved my sanity. Worth every penny just for the stress reduction.

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Emma Thompson

•8M

Quick tip from someone who does this regularly - if your income is genuinely below all thresholds, you might not even need to file a self assessment next year. You can call HMRC and ask to be taken out of self assessment if you no longer meet the criteria. Common reasons people stay in self assessment unnecessarily: - They had a one-off income spike - They started self-employment but then stopped - They previously had multiple income sources but now just have PAYE Just something to consider if your situation has changed permanently.

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Emma Thompson

•8M

Yes, that's right! Complete your 2021-2022 return first (which will show your income is below thresholds), then call HMRC and explain that you've closed your business and no longer need to be in the self assessment system. They'll ask a few questions to confirm you don't meet any of the criteria, and if they agree, they'll remove you from the system. Make sure you keep the confirmation they send you about this. Most people find it's a huge relief not having to worry about the annual self assessment deadline anymore!

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