‘Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed).
You have to make 2 payments on account every year unless:
- your last Self Assessment tax bill was less than £1,000
- you paid more than 80% of the previous year’s tax you owed, for example through your tax code or because your bank had already deducted interest on your savings
Each payment is half your previous year’s tax bill. Payments are usually due by midnight on 31 January and 31 July.
If you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31 January next year.
ExampleYour bill for the 2022 to 2023 tax year is £3,000. You made 2 payments of £900 each(£1,800 in total) on account towards this bill in 2023.
The total tax to pay by midnight on 31 January 2024 is £2,700. This includes:
- your ‘balancing payment’ of £1,200 for the 2022 to 2023 tax year (£3,000 minus £1,800)
- the first payment on account of £1,500 (half your 2022 to 2023 tax bill) towards your 2023 to 2024 tax bill
You then make a second payment on account of £1,500 on 31 July 2024.
If your tax bill for the 2023 to 2024 tax year is more than £3,000 (the total of your 2 payments on account), you’ll need to make a ‘balancing payment’ by 31 January 2025.
Payments on account do not include anything you owe for capital gains or student loans (if you’re self-employed) - you’ll pay those in your ‘balancing payment’.
Check your payments on account
Select the option to view your latest Self Assessment return.
Select ‘View statements’.
You’ll then be able to see:
- payments on account you’ve already made
- payments you need to make towards your next tax bill
Reduce your payments on account
If you know your tax bill is going to be lower than last year, you can ask HM Revenue and Customs (HMRC) to reduce your payments on account. You can do this either online or by post.
To reduce your payments on account online
Select the option to view your latest Self Assessment return.
Select ‘Reduce payments on account’.
To reduce your payments on account by post
To apply by post send form SA303 to your tax office.
If you overpay or underpay
You might pay the wrong amount if your tax bill is higher or lower than you expected.
If you overpay, HMRC will send you a refund.
If you underpay, you’ll be charged interest.
