Maya’s 2026/27 tax bill was £4,000, her first, so she saved £4,000. On 31 January 2028 HMRC asked for £6,000. Nothing had gone wrong. She’d met payments on account.
What payments on account are
- Advance payments towards your next bill, in two halves.
- Each one is usually half of last year’s bill, due on 31 January and 31 July.
- They aren’t extra tax. They’re credited against what you finally owe.
- They cover Income Tax and Class 4 NI. Capital Gains Tax, student loan repayments and Class 2 NI are paid with the balancing payment instead.
You don’t need them if last year’s Self Assessment bill was under £1,000, or if more than 80% of last year’s tax was paid another way, for example through PAYE.
Maya’s first January
| Date | Made up of | Due |
|---|---|---|
| 31 Jan 2028 | £4,000 balance for 2026/27 + £2,000 first payment on account for 2027/28 | £6,000 |
| 31 Jul 2028 | £2,000 second payment on account for 2027/28 | £2,000 |
In your first year of payments on account, January can include the whole bill for the year just ended plus half of the next one.
The year after: the balancing payment
- Maya’s 2027/28 bill turns out to be £4,800.
- She’s already paid £4,000 on account, so the balancing payment on 31 January 2029 is £800.
- The first payment on account for 2028/29 is half of £4,800: £2,400.
- That January she pays £3,200, then £2,400 on 31 July 2029.
Assumptions: a £4,000 Income Tax and Class 4 bill for 2026/27; no payments on account made before; none of the tax collected through PAYE; no claim to reduce payments on account.
See your own January and July. Enter your bills and the timeline shows what’s due on each date.
Open the timelineCan I reduce them?
If you reasonably expect a lower bill, you can ask HMRC to reduce your payments on account through your online account or form SA303. Keep your workings. Reduce too far and HMRC charges interest on the shortfall.
Plan for it
Your first January after starting, or after a big jump in profit, is the one that catches people out. Forecast your tax during the year, keep tax money separate, and budget for the full combined amount. How much should you set aside? walks through a dated plan.
January is the heaviest set of the year. Prepare for it all year and it becomes another rep.
Put the dates in your phone. Every 2026/27 deadline, with a reminder a week before.
Add my deadlinesFrom The UK Tax Guide 2026/27 (chapter 6), checked 21 October 2026. Sources: GOV.UK payments on account · HMRC Self Assessment Manual SAM1010 · Self Assessment deadlines. Educational information, not tax advice. Check GOV.UK or speak to a qualified adviser before acting.