Forex

Another self-assessment tax deadline is fast approaching. On July 31, the second instalment of payments on account for 2007/08 is due.

So, with the prospect of further alterations to the self-assessment tax system later this year, accountants say it is more important than ever that the self-employed and those with rental income are organised in their tax administration. Self-assessment tax payments are bi-annual: one due on January 31 and one on July 31. Any additional payments are then met on January 31 the following year.

July 31 is also a critical date for those who missed the January tax return deadline, says Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants. Those who have not handed in their 2006/07 tax returns must file or incur a second £100 penalty and second 5 per cent surcharge on any tax unpaid.

Roughly 9m people are required to complete self- assessment returns, and historically just under than 10 per cent miss the deadline. HMRC says the number of those who don’t file on time has remained unchanged. “The fact that the percentage is the same makes you wonder if the £100 penalty has lost some of its potency,” says John Whiting, tax partner at PwC.