Answers · UK 2025/26

What is a payment on account for Self Assessment?

A payment on account is an advance payment towards your NEXT tax year's Self Assessment bill, required if your last tax bill was over £1,000 and less than 80% of your tax was collected at source. You pay two instalments -- 31 January and 31 July -- each normally half of your previous year's total tax liability.

Last updated: 1 July 2026Last reviewed: 1 July 2026How we verify

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Payments on account are HMRC's way of collecting tax in advance from people whose income (typically self-employed profits, rental income, or other untaxed income) is not deducted automatically through PAYE, spreading the burden across the year rather than one large annual bill. **Who has to make them** You are usually required to make payments on account if your Self Assessment bill for the most recent tax year was more than £1,000, AND less than 80% of your total tax was already collected at source (for example through PAYE tax codes). If you meet both conditions, HMRC automatically calculates two payments on account for the following year, each equal to half of your most recent year's tax bill (excluding Capital Gains Tax and Student Loan repayments, which are not included in the payments-on-account calculation). **The two deadlines** - First payment on account: due 31 January (the same date as the balancing payment for the tax year just ended) - Second payment on account: due 31 July **How it fits together with the balancing payment** When you file your return for the year the payments on account related to, HMRC compares your actual tax bill with what you already paid via the two payments on account. If you owe more, you pay a "balancing payment" by the following 31 January (alongside the first payment on account for the NEXT year). If you overpaid, you get a refund or credit against future payments. **Worked example** For the 2024/25 tax year, Elena owed £4,000 in Self Assessment tax, with no significant PAYE tax deducted at source. Because this is over £1,000 and mostly untaxed, HMRC sets payments on account of £2,000 each for 2025/26, due 31 January 2026 and 31 July 2026. When Elena files her 2025/26 return, if her actual bill for that year turns out to be £4,500, she pays the £500 balancing amount plus the first £2,250 payment on account for 2026/27, all by 31 January 2027. **Opting to reduce payments on account** If you expect lower income in the coming year, you can apply to reduce your payments on account (form SA303 or online) rather than waiting for a refund after overpaying -- but reducing them too aggressively without good evidence can trigger interest charges if your actual liability turns out higher than the reduced payments. **Practical tip** Budget throughout the year for both payments on account plus any balancing payment, ideally setting aside a percentage of income into a separate savings account as you earn it, so the 31 January and 31 July deadlines never come as a cash-flow shock.