Payments on account do not apply
Payment timeline - 2026/27
Quick payment on account reference
| Last year's bill after PAYE | Each POA | Total POA |
|---|---|---|
| £1,500 | £750.00 | £1,500.00 |
| £2,000 | £1,000.00 | £2,000.00 |
| £3,000 | £1,500.00 | £3,000.00 |
| £5,000 | £2,500.00 | £5,000.00 |
| £10,000 | £5,000.00 | £10,000.00 |
| £20,000 | £10,000.00 | £20,000.00 |
| £50,000 | £25,000.00 | £50,000.00 |
How payments on account work
Payments on account are advance payments towards your next Self Assessment tax bill. HMRC uses them to spread the cost of tax across the year rather than collecting everything in a single lump sum.
Who has to make payments on account?
HMRC applies two tests to the previous tax year. Payments on account are not due if either is true:
- Your Self Assessment bill, meaning your total income tax and Class 4 National Insurance minus tax already deducted at source (PAYE, tax taken off savings interest and so on), was less than £1,000.
- More than 80% of the total tax you owed was collected at source.
The £1,000 test runs on the amount left to pay through Self Assessment, not on your total tax. Someone with £4,000 of tax who had £3,100 taken through PAYE (77.5%, so under the 80% line) owes £900 through Self Assessment. That is under £1,000, so no payments on account are due even though their total tax is £4,000. Source: gov.uk, payments on account (checked 1 October 2026) and section 59A of the Taxes Management Act 1970.
How are they calculated?
HMRC assumes your next year's tax bill will be roughly the same as the previous year, so each instalment is half of the net amount you owed through Self Assessment.
The three payment dates
31 January (during the tax year): First payment on account. This is 50% of the previous year's Self Assessment liability.
31 July (after the tax year): Second payment on account. Another 50% of the previous year's liability.
31 January (following year): Balancing payment. Once you file your return, any remaining tax owed after deducting the two payments on account is due. If you overpaid, you receive a refund.
What if my income changes?
If your income rises, the balancing payment covers the shortfall. If your income falls, you may receive a refund. You can also apply to HMRC to reduce your payments on account if you expect a lower bill, but be careful: if you reduce too much, HMRC charges interest on the underpayment.
Payment on account examples
Each example was run through the calculator above with the inputs shown. “Last year” is 2025/26, so the payments on account fall on 31 January 2027 and 31 July 2027 and the balancing payment on 31 January 2028. They assume the person was already making payments on account the year before.
Self-employed, profits rising
Last year’s bill was £6,000 with nothing taxed at source, so each payment on account is £3,000.00. This year’s tax is expected to be £7,200, which leaves a balancing payment of £1,200.00 in January 2028. That January also brings the first payment on account for 2027/28, worked out from the new, higher bill.
Self-employed, profits falling
Last year’s £8,000 bill sets two payments of £4,000.00. If this year’s tax is only £5,000, paying both in full means £3,000.00 comes back after the return is filed. Claiming a reduction before paying keeps that money in the business instead.
Employee with rental income: the 80% test
Total tax was £9,000, of which £7,500 came through PAYE. That is more than 80% collected at source, so no payments on account are due even though £1,500.00 is left to pay. The whole £1,500.00 is due in one go on 31 January. Had PAYE covered only £6,000, the 80% test would fail and two payments of £1,500 would be due instead.
Rules that change the answer
Your first year in Self Assessment
If you did not make payments on account last year, the first 31 January payment is the whole of last year’s bill plus the first payment on account for the current year: one and a half times the bill. Payments on account include Class 4 National Insurance, while any Capital Gains Tax and, for the self-employed, student loan repayments are added to the balancing payment (GOV.UK: Understand your Self Assessment tax bill, checked 30 October 2026).
Reducing payments on account
You can ask HMRC to reduce them if your profits or other income fall, your tax reliefs go up, or more tax is deducted at source than last year. Apply online or with form SA303, by 31 January after the end of the tax year (GOV.UK: Claim to reduce payments on account, checked 30 October 2026).
Late payment and payment plans
Late payment interest is charged at Bank of England base rate plus 4% (HMRC interest rates, checked 30 October 2026). If you cannot pay, you can ask to set up a payment plan with HMRC; if your bill is not yet due, a Budget Payment Plan lets you pay weekly or monthly by Direct Debit ahead of it (GOV.UK: If you cannot pay your tax bill on time, checked 30 October 2026).
Changes ahead
Budget 2026 plans more regular, automated in-year payments for people who make payments on account, from April 2029, with an option to pay through PAYE (HMRC: Budget 2026 overview of tax legislation, checked 30 October 2026). The two-payment system still applies for 2026/27.
Common mistakes
Running the £1,000 test on total tax. It applies to the amount left after tax taken at source. Enter your PAYE tax in the second box.
Treating the balancing payment as the whole January bill. In most years the January payment is the balancing payment plus the first payment on account for the next year. Plan for both.
How this calculator works: it takes last year’s total tax, subtracts tax deducted at source, checks the £1,000 and 80% tests, and splits what is left into two equal payments. With an estimate of this year’s tax, it shows the balancing payment or refund. The rules were last checked against GOV.UK on 30 October 2026. Every source is listed on our methodology page.