Payments on account are two advance payments towards a Self Assessment tax bill, each normally half of the previous year's bill. They are due on 31 January and 31 July.
When they apply
HMRC asks for payments on account unless your last Self Assessment bill was less than £1,000, or more than 80% of your tax was already deducted at source, for example through PAYE. They cover Income Tax and Class 4 National Insurance, but not Capital Gains Tax or student loan repayments.
An example
Your bill for the 2025 to 2026 tax year is £4,000. Towards the 2026 to 2027 tax year you pay:
- £2,000 on 31 January 2027 (on top of anything still owed for 2025 to 2026);
- £2,000 on 31 July 2027;
- a balancing payment on 31 January 2028 if the final bill is more than £4,000, or a refund if it is less.
Heads up — in your first year in Self Assessment, the January payment is the whole of the first year’s tax plus half as much again towards the next.
Reducing them
If you expect your income to fall, you can ask HMRC to reduce your payments on account. If you reduce them by too much, HMRC charges interest on the shortfall.
Read more: Your Self Assessment calculation.