What payments on account are
Instead of paying all your tax for a year in one go after it ends, HMRC asks most Self Assessment taxpayers to pay towards it in advance, in two instalments. These are payments on account. Each is usually half of the tax you owed the previous year.
When you file the following year's return, HMRC compares what you paid on account with what you actually owe. You either pay the difference (the balancing payment) or get a refund.
When you have to make them
You must make payments on account unless either of these applies:
- Your last Self Assessment bill was less than £1,000.
- You paid more than 80% of last year's tax another way — for example through PAYE at work.
So employees with a small amount of extra income often don't make them, while sole traders and landlords usually do.
Useful tool
Work out this year's bill, then halve it to see each payment on account.
Due dates
| Date | What you pay |
|---|---|
| 31 January 2027 | Balancing payment for 2025/26 plus 1st payment on account for 2026/27 |
| 31 July 2027 | 2nd payment on account for 2026/27 |
| 31 January 2028 | Balancing payment for 2026/27 plus 1st payment on account for 2027/28 |
A worked example
Sam became self-employed during 2025/26 and owes £4,000 for that year. It's Sam's first year, so nothing was paid on account.
| Date | Payment | Amount |
|---|---|---|
| 31 Jan 2027 | 2025/26 balancing payment | £4,000 |
| 31 Jan 2027 | 1st payment on account for 2026/27 (50% of £4,000) | £2,000 |
| Total due in January | £6,000 | |
| 31 Jul 2027 | 2nd payment on account for 2026/27 | £2,000 |
If Sam's 2026/27 tax turns out to be £5,000, the January 2028 balancing payment is £1,000 (£5,000 minus the £4,000 already paid on account), plus the first payment on account for 2027/28.
The first-year shock
In your first year, January's bill can be 150% of a year's tax. Set money aside from the start — a common rule of thumb is 20–30% of profit, depending on your tax band.Reducing your payments on account
If you expect to earn less this year — for example you've stopped trading or had a quiet year — you can ask HMRC to reduce them:
- Online: sign in to your account and choose 'Reduce payments on account'.
- By post: send form SA303.
Be realistic. If you reduce them and your final bill is higher, HMRC charges interest on the difference from the original due dates.
Seeing it clearly
When you prepare your return with TaxGo, your tax calculation shows the balancing payment and any payments on account separately, so January's total isn't a surprise. Ready to pay? See how to pay HMRC.