Answers · UK 2025/26
What are Self Assessment payments on account?
Payments on Account are advance Income Tax instalments due in January and July. Each = 50% of your previous year's tax bill, payable if last year's liability exceeded £1,000. Reduces your January balancing payment, but means paying tax before you've earned the income.
Full answer
UK Self Assessment Payments on Account 2025/26. When triggered: your previous tax year's Income Tax liability (excluding tax already deducted at source like PAYE) exceeded £1,000, AND less than 80% of your total Income Tax came from PAYE/Class 1 NI. Calculation: each Payment on Account = 50% of previous tax year's "balancing" Income Tax + Class 4 NI. Total = 100% of last year, paid in advance. Schedule: 1st payment on account by 31 January (alongside any balancing payment for the year just ended); 2nd by 31 July. Example: 2024/25 return shows £6,000 tax. By 31 January 2026 you pay: balancing payment £6,000 + first Payment on Account £3,000 = £9,000. By 31 July 2026, second Payment on Account £3,000. When you file your 2025/26 return (by 31 January 2027), reconcile: if liability £8,000, you've already paid £6,000 via PoAs → balancing £2,000. If liability £4,000, you've overpaid £2,000 → refund OR offset against 2026/27 first PoA. Reducing PoA: request reduction via SA303 (or via online account) if you know your income has dropped — but if HMRC find you should have paid more, they charge interest (currently base + 2.5%). Avoid: don't request reduction speculatively without strong evidence. Cash flow tip: set aside ~30% of self-employment income each month for PoA + balancing payments.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.