Tx notes fa22 Final

Calculate the chargeable gain arising. 
You may now attempt Practice Questions 29 to 31



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Chapter 15
SELF-ASSESSMENT AND PAYMENT 
OF TAX FOR INDIVIDUALS 
1. Due dates for payment 
The responsibility for providing the information to calculate the tax liability of the taxpayer and 
making the payments, lies with the individual and this information must be submitted on a self 
assessment tax return (see section 4). For many taxpayers they will only have employment income, 
for which income tax and Class 1 NIC will have been deducted at source through the PAYE system 
as discussed in Chapter 9 and no tax return will be required. 
Taxpayers with other sources of income must disclose this on a tax return and settle any income tax 
liability, Class 2 & 4 NIC liability along with any CGT liability as follows: 
Normal due date 
Taxpayers are expected to settle outstanding liabilities by 31 January following the end of the tax 
year for:
๏
income tax
๏
class 2 and class 4 NIC
๏
capital gains tax.
Payments on account 
Any income tax and class 4 NIC not collected at source are payable by self assessment and 
payments on account (POAs) may be required (capital gains tax and class 2 NIC should not be 
included in these POAs. 
Due dates of POAs are:
๏
first POA = 31 January in the tax year
๏
second POA = 31 July following the end of the tax year.
Each POA = calculated based on 50% of the previous year’s tax payable by self-assessment
No payments on account are due if the previous years tax payable by self assessment was 
≤
£1,000, 
or
if more than 80% of the tax liability for the previous year was deducted at source.
Class 4 NIC is payable at the same time as the income tax on trading income. Class 2 NIC is payable 
through self assessment by normal due date (31 January following end of tax year) but no payments 
on account are required.
Note, the taxpayer can claim to reduce payments on account at any time before 31 January 
following the tax year. This would be done if actual income tax and class 4 NIC is expected to be 
less than the previous year. If the claim is incorrect, penalties and interest will be charged.

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