Free tool · Self Assessment

Paymentson account.

Find out if HMRC will ask you to pay towards next year's bill in advance, and exactly how much is due in January and July.

Last year's Self Assessment bill

The tax and Class 4 NI due through Self Assessment (not counting tax already deducted).

Tax already deducted at source

PAYE on wages and pensions, plus any other tax taken before you were paid.

The two tests

Self Assessment bill is £1,000 or moreYours: £4,000
80% or less of your tax was collected at sourceYours: 0% at source

Both must be true for payments on account to apply.

Each payment on account

Illustrative estimate

£0.00

Your bill is £1,000 or more and less than 80% was collected at source.

1st payment on account · 31 January£0.00

2nd payment on account · 31 July£0.00

Total paid in advance£0.00

On the next 31 January you also pay any balancing payment: the actual bill minus these two payments. If your income fell, you can ask HMRC to reduce them.

Illustrative estimate based on HMRC's £1,000 and 80% rules. Your SA302 or online account shows the exact figures.

Work out the real numbers

What payments on account are

Payments on account are advance payments towards your next Self Assessment bill. Because nobody deducts tax from self-employed profits, rental income or other untaxed income during the year, HMRC asks you to pay in two instalments based on your last bill, then settle up once your return is in.

Who has to make them

Payments on account apply when both of these are true:

Your last Self Assessment bill was £1,000 or more.
80% or less of all the tax you owed was collected at source, for example through PAYE on a salary or pension.

Many employees who only file for a small amount of extra income never have to make them, because most of their tax is already taken through PAYE.

How much and when

Each payment on account is 50% of last year's Self Assessment bill. For the 2025/26 tax year:

1st payment on account: 31 January 2026
2nd payment on account: 31 July 2026
Balancing payment (any difference): 31 January 2027, at the same time as the first payment on account for 2026/27

Payments on account cover income tax and Class 4 National Insurance. They don't include Capital Gains Tax or student loan repayments, which are paid in full in the balancing payment.

Worked example

Sam's 2024/25 Self Assessment bill was £4,000 and none of it was taxed at source. For 2025/26 Sam pays £2,000 on 31 January 2026 and £2,000 on 31 July 2026. When Sam files the 2025/26 return, the real bill turns out to be £4,600, so Sam pays a £600 balancing payment on 31 January 2027, plus £2,300 as the first payment on account for 2026/27.

If your income drops

You can ask HMRC to reduce your payments on account if you expect a smaller bill, for example if your business slowed down. Be careful: if you reduce them and the final bill is higher, HMRC charges interest on the difference. If you can't afford a payment, look at a Time to Pay arrangement before the deadline.

TaxGo works out your payments on account as part of your return, so you see the full January bill before you approve anything.

Questions

Asked and answered.

When do I have to make payments on account?

When your last Self Assessment bill was £1,000 or more, unless more than 80% of all the tax you owed was already deducted at source, for example through PAYE.

How much is each payment on account?

Each payment is half of your previous year's Self Assessment bill. The first is due on 31 January during the tax year and the second on 31 July after it ends.

What is a balancing payment?

If your actual bill for the year is more than the two payments on account you made, you pay the difference by 31 January after the tax year ends. If you paid too much, HMRC refunds it or puts it towards your next bill.

Can I reduce my payments on account?

Yes. If you expect your income to fall, you can ask HMRC to reduce them through your online account or on form SA303. If you reduce them too far, you'll pay interest on the shortfall.

Why is my first January tax bill so high?

In your first year of self-employment you usually pay the whole of last year's bill plus the first payment on account for the current year, both on 31 January, so the first bill can be up to one and a half times the year's tax.

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