Payments on account explained

Payments on account are advance payments towards your next Self Assessment bill. Each one is half of your last bill, and they're due on 31 January and 31 July.

Do you have to make them?

• Yes, if your last Self Assessment bill was £1,000 or more.
• Not if more than 80% of the tax you owed was already taken at source, for example through PAYE on a salary or pension.

They cover Income Tax and Class 4 National Insurance. They don't include Capital Gains Tax or student loan repayments, which you pay in full by 31 January.

An example

Say your bill for 2025/26 is £4,000, and it's your first year in Self Assessment.

• By 31 January 2027: the £4,000 for 2025/26, plus your first payment on account for 2026/27 of £2,000. That's £6,000.
• By 31 July 2027: your second payment on account for 2026/27, £2,000.
• By 31 January 2028: whatever is still owed for 2026/27 (the balancing payment), plus your first payment on account for 2027/28.

If your 2026/27 bill turns out to be £5,000, the balancing payment is £1,000. If it's £3,000, you've paid £1,000 too much, and it comes off what you owe next or is paid back to you.

Your first January is the big one

Because the first payment on account falls on the same day as your first bill, January in your first year can be up to one and a half times the bill. The set-aside calculator helps you plan for it.

If your income drops

If you expect your next bill to be lower, you can ask HMRC to reduce your payments on account, in your HMRC online account or with form SA303. If you reduce them by too much, you'll pay interest on the difference.

See payments on account on GOV.UK (opens in new tab) and ways to pay (opens in new tab).

Octotax shows your payments on account with your other dates once you tell us you make them in Your setup. General information, not tax advice.