Self Assessment Payments on Account Explained

Payments on account are two advances towards the next tax year’s bill. Each is normally half the previous year’s relevant Income Tax and Class 4 National Insurance liability, after allowing for tax deducted at source. The usual deadlines are 31 January and 31 July.

Capital Gains Tax, Self Assessment student-loan and postgraduate-loan repayments, and Class 2 National Insurance are excluded from that calculation. Amounts collected through PAYE can also affect it.

You normally need payments on account unless the relevant amount owed for the previous year was less than £1,000, or more than 80% of your tax was collected outside Self Assessment, for example through PAYE.

Exactly £1,000 or exactly 80% does not qualify for those exceptions by itself. Other circumstances can change the position; check your HMRC statement rather than assuming every Self Assessment bill requires advances.

Suppose your 2025/26 Income Tax and Class 4 National Insurance bill is £4,800. No tax has been deducted, you have made no earlier payments, and the ordinary payments-on-account rules apply. There are no other charges in this illustration.

1. 1
   31 January 2027: £7,200

   £4,800 settles 2025/26, and £2,400 is the first advance towards 2026/27. That advance is half of £4,800.

2. 2
   31 July 2027: £2,400

   Pay the second advance towards 2026/27. The two advances now total £4,800 credited to that year.

3. 3
   31 January 2028: settle the difference

   Compare the actual 2026/27 bill with those £4,800 of advances. Any remaining balance is normally due alongside the first advance for 2027/28.

The January 2027 payment covers two different tax years. It does not mean that your 2025/26 tax has risen from £4,800 to £7,200. These are illustrative amounts, not a calculation of your own bill.

If the actual 2026/27 bill in that example is £5,100, subtract the £4,800 already paid to leave £300. The new first advance is normally £2,550, so £2,850 would be due on 31 January 2028: £300 plus £2,550.

If the actual bill is lower than the advances, you may have an overpayment instead. Check HMRC’s account before requesting a refund or making another payment.

If you reasonably expect your next bill to be lower, you can ask HMRC to reduce the advances through your online account or form SA303. This is a claim, not permission to skip a payment without checking your position.

Reducing them too far can mean interest on the shortfall. Check HMRC’s guidance before making a claim. If you cannot pay on time, contact HMRC about payment support rather than treating a lower advance as a payment arrangement.