Reduction in Payments on Account

Client Risk Disclosure and Acknowledgement of Responsibility

Client Details

1. What Are Payments on Account?

Payments on account are advance payments towards your Self Assessment tax bill for the current tax year. HMRC requires these payments when your previous year's tax liability exceeded £1,000 and less than 80% of that tax was collected at source, for example through PAYE. Each payment on account is set at 50% of your previous year's tax liability and falls due on 31 January and 31 July each year.

You have asked us to submit a claim to HMRC to reduce your payments on account below the amounts that would otherwise be due. This document sets out the risks associated with that request and the basis on which we will act on your instructions.

2. Grounds for Reduction

HMRC permits a reduction to payments on account where you have reasonable grounds to believe your tax liability for the current year will be lower than the previous year. Acceptable grounds include a reduction in income, a change in your business activity, retirement, or other circumstances that will genuinely reduce your taxable income. We will submit your reduction request on the basis of the information and instructions you have provided to us.

3. Risks of Reducing Payments on Account

Reducing your payments on account is not without risk. You should read this section carefully before confirming your instruction.

4. Our Role and the Limits of Our Responsibility

We will act on your written instruction to reduce your payments on account based on the information you have provided. We will make the reduction claim to HMRC on your behalf in good faith and in accordance with your stated reasons.

We are not responsible for any interest, penalties, or additional tax arising as a result of your payments on account being set at a level that proves insufficient once your final tax position is established. The accuracy of any estimate of your current year income or liability is your responsibility. We rely entirely on the information you provide to us and are not required to independently verify your income position.

If your circumstances change during the year in a way that is likely to increase your tax liability, you have an obligation to inform us promptly so that we can advise you accordingly and, if appropriate, reinstate payments on account or make alternative arrangements.

5. Client Declaration and Acknowledgement

By E-signing this document, I confirm and agree to all of the following:

1.     I have requested that my payments on account for the tax year shown above be reduced, and I understand that this reduction is based solely on my own assessment of my likely tax position for the current year.

2.     I understand that if my actual tax liability for the current year exceeds the reduced payments I have made, HMRC will charge interest on the difference from the original due dates, and I accept sole responsibility for that interest.

3.     I understand that any shortfall will form part of my balancing payment due on 31 January following the end of the tax year, which may result in a significantly larger payment than I would otherwise have faced.

4.     I acknowledge that my accountant and their firm have advised me of the risks set out in this document and have acted solely on my instruction.

5.     I confirm that my accountant and their firm bear no responsibility or liability whatsoever for any interest charges, penalties, or additional tax arising as a direct or indirect result of this reduction request.

6.     I confirm that if my financial circumstances change materially during the tax year, I will notify my accountant promptly so that appropriate advice can be provided.