Payments on account explained: why your tax bill is bigger than you expected
21 October 2026 · 5 min read · Checked against GOV.UK 21 October 2026
What payments on account are
If you're self-employed, nobody takes tax off your income as you earn it. So HMRC asks you to pay towards the current year's tax in two instalments, before the year's figures are final. These are payments on account.
Each one is half of your previous year's Self Assessment bill for Income Tax and Class 4 National Insurance. Student loan repayments and Capital Gains Tax aren't included.
When they're due
| Date | What you pay |
|---|---|
| 31 Jan 2027 | Last year's bill, plus the 1st payment on account |
| 31 Jul 2027 | The 2nd payment on account |
| 31 Jan 2028 | Anything still owed (the balancing payment), plus next year's 1st payment |
Example: a steady year
Who doesn't make them
- Your last Self Assessment bill was under £1,000.
- 80% or more of all the tax you owed was taken off at source, for example through PAYE on wages or a pension.
HMRC works this out from your return. If you don't need to make them, your tax summary won't show any.
If you expect to earn less this year
You can ask HMRC to reduce your payments on account if you think this year's bill will be lower: for example, your work has dropped off, or you've stopped trading. You can do this in your HMRC online account, or by post with form SA303.
Be careful not to reduce them too far. If your final bill turns out higher, you pay the difference with interest from the dates the payments were first due.
Example: a quieter year
If you expect to earn more
Nothing changes until your return: the payments stay at half of last year's bill, and you pay the rest as a balancing payment the following January. That catches out people whose income is growing, because the January bill then includes both the balance and a bigger first payment on account. Putting aside part of every payment you receive avoids the shock.
Want to see what yours will be? Our self-employed tax calculator works out your bill and your payments on account. HMRC's guidance is on GOV.UK (opens in a new tab).