Payments on account are advance payments towards the next Self Assessment liability, normally due on 31 January and 31 July. Each is usually half the relevant previous-year bill. Your first January can include the balance for one year and an advance payment for the next.
How the two instalments work
GOV.UK explains that you can spread the cost by paying in two instalments. Each payment is usually half of the tax you owed last year. They are due by midnight on 31 January and 31 July.
On 31 January you may also owe a balancing payment for the year you have just reported, alongside the first payment on account towards the following year. That stack is why January often looks like two demands at once.
When they might not apply
According to GOV.UK, you must make the two payments unless either:
- the tax you owed last year was less than £1,000, or
- last year you paid more than 80% of the tax you owed outside Self Assessment (for example through your tax code, or because tax was already deducted at source on some income)
Clearer numbers (January stack)
Suppose last year’s Self Assessment bill was £4,000. Payments on account towards the next year are usually £2,000 by 31 January and £2,000 by 31 July.
If you had already paid £1,800 on account during the previous cycle against that £4,000 bill, your January amount might look like:
- £2,200 balancing payment (£4,000 − £1,800), plus
- £2,000 first payment on account towards the following year
So £4,200 could be due on one January date even though nothing “mysterious” has happened. If the following year’s final bill is only £3,000, the excess paid on account is typically settled through the balancing calculation. It is not lost.
Reducing payments on account
If you expect to owe less than last year, you can ask HMRC to reduce payments on account (online or by post) using a realistic estimate. Do not reduce them casually: GOV.UK is clear that if you reduce them and your bill turns out higher than expected, you can be charged interest on the difference. For the how-to steps, see how to reduce Self Assessment payments on account.
Filing dates vs this article
Filing deadlines are covered in the Self Assessment deadline guide. This page is about the advance-payment rhythm that often surprises people after a larger SA bill.
If you cannot pay
Contact HMRC early and use the payment options on GOV.UK. Late payment can attract interest and late payment penalties on unpaid tax. Filing on time still matters while you sort payment.
If you want help preparing the return that feeds these figures, TaxSimba’s Self Assessment service works from the information you provide. We do not promise a lower bill or a particular payment outcome. Always check your HMRC statement and current GOV.UK guidance.
Check the home nation used for your tax calculation
Tell the accountant whether you live in England, Scotland, Wales or Northern Ireland, and about any moves during the tax year. Scottish rates differ for wages, pensions and most other taxable income; savings and dividends use UK rules. Welsh rates are set separately. Use the rules for the relevant year and your actual taxpayer status.
See Scottish Income Tax and Welsh Income Tax. These differences do not make a London address or an England-only earnings example appropriate for everyone.
Keep payments on account out of the earlier-year total
Illustrative preparation example.
An illustrative £4,000 relevant bill can be accompanied by a £2,000 first payment on account, making £6,000 due in January before other adjustments. The second £2,000 instalment belongs on the July line. Do not describe the £8,000 combined payments as all being tax on one year.
Check: Which payment settles the earlier year and which is an advance towards the next?
| Check | Practical action |
|---|---|
| Which tax year does each charge cover? | Separate the balancing payment from the two advance instalments on the HMRC statement. |
| What have you already paid? | Match dated payments and credits to the account before paying a figure copied from a calculation. |
| Has the next year's expected liability changed? | Prepare a supported estimate before requesting a reduction; an excessive reduction can trigger interest. |
Are payments on account a separate tax?
They advance part of the next Self Assessment liability. The later return reconciles what you actually owe with amounts already paid.
Does filing early mean paying immediately?
Submitting a return early does not normally bring forward the statutory payment date. Check the dated charges on your account, particularly any older overdue amounts.
Download a checklist for this guide
- List each January charge with its tax year.
- Record payments and credits already on the account.
- Estimate the next year's income and deductible costs.
- Check tax deducted outside Self Assessment.
- Set January and July reminders and a monthly savings target.