If I have unpaid prepayments, will I have to pay them later as back taxes?

You receive credit for the prepayments that we have imposed on you. Prepayments are credited in the tax assessment of the year for which they were imposed. The credit is equal to the original value of the prepayment. This rule concerns both the prepayments imposed during the tax year, and those imposed after the end of the tax year if they relate to the same tax year.

This means that a prepayment imposed for a tax year will be credited in that year’s tax assessment even if you have not paid it. For this reason, unpaid prepayments are not re-imposed as a back tax. However, if you have failed to make your prepayments, late-payment interest will be added to it from the day after the due date up to the date when you make the payment. The rate of late-payment interest is 11% in 2024. An unpaid prepayment may be transferred to the enforcement authorities for recovery.

If you have made prepayments that are not needed to cover your tax liability for the year, we will credit them to you by reducing your future prepayments. Unnecessary prepayment instalments will be cancelled. We will also cancel any unpaid prepayments, including any interest on them, if they are not needed to cover the year’s taxes.