Self Assessment Payment on Account Deadline 2026/27
Payments on account are usually due on 31 January and 31 July. See who must pay, how HMRC calculates them and when reductions are allowed.
The Self Assessment payment on account deadline can create a larger January bill than many taxpayers expect. You may have to settle the remaining tax for the previous year and make an advance payment towards the current year on the same date. A second advance instalment can then become due six months later. Understanding this cycle is particularly important for sole traders, landlords and people whose income is not fully taxed before they receive it.
A payment on account is not an additional tax charge. It is an advance tax payment that HMRC credits against your eventual Self Assessment liability for the relevant year. The amount is usually estimated from the previous year’s Income Tax and Class 4 National Insurance liability. When your next return is completed, HMRC compares the advance payments with the amount you actually owe.
The main payment dates are normally 31 January and 31 July, but the amounts due on each date can be different. The January deadline may include a balancing payment as well as the first payment on account for the following year. The July deadline normally covers only the second payment on account. Checking your HMRC statement before each deadline can prevent missed payments and cash-flow surprises.
What Is a Payment on Account?
A payment on account is an advance instalment towards your next Self Assessment bill, normally paid in two equal amounts based on the previous year’s relevant tax liability.
According to HMRC guidance on payments on account, each instalment is usually half the tax you owed for the previous year. The two payments help spread part of the next year’s liability across January and July. They generally include Income Tax and Class 4 National Insurance where applicable. HMRC records both payments as credits against the final bill for that tax year.
Payments on account do not normally include every amount shown on a Self Assessment calculation. HMRC’s technical guidance confirms that Capital Gains Tax, student loan repayments and postgraduate loan repayments are excluded from the calculation. Class 2 National Insurance is also excluded, while Class 4 National Insurance is generally included. Excluded amounts are normally settled through the balancing payment after the tax year ends.
A payment on account is based on the assumption that your relevant tax liability will be similar to the previous year. It is not a final calculation of the current year’s bill. Your income, allowable expenses, pension contributions, reliefs and tax deducted at source may all change the eventual liability. The difference is resolved after the next Self Assessment return is completed.
Who Has to Make Payments on Account?
Payments on account are normally required when the previous year’s relevant Self Assessment liability was at least £1,000 and no more than 80% of the tax was collected outside Self Assessment.
At the time of writing, HMRC normally requires two payments on account unless the previous year’s relevant tax liability was less than £1,000 or more than 80% of the tax was collected outside Self Assessment. Tax collected outside Self Assessment can include PAYE deductions made through a tax code. These exceptions mean that not everyone who files a tax return has to make advance payments. Always check GOV.UK for current payment-on-account rules.
Sole traders often fall within the rules because their trading profits are not normally taxed before they receive them. Landlords, partners and people receiving substantial untaxed income may also have payments on account. Someone who is both employed and self-employed may or may not qualify, depending on the amount collected through PAYE and the remaining Self Assessment liability. The tax calculation and HMRC statement should show whether advance payments have been created.
The £1,000 test applies to the relevant amount used for payments on account rather than every charge appearing on the final bill. A tax calculation containing Capital Gains Tax or student loan repayments may therefore exceed £1,000 without automatically creating payments on account for those components. Conversely, a sufficiently large amount of untaxed Income Tax and Class 4 National Insurance can trigger the requirement. Check the payment section of the completed return rather than relying only on the headline balance.
The Self Assessment tax return guide explains who may need to file and the wider submission process. This article focuses specifically on the payment cycle after a return creates payments on account. Filing and payment are separate obligations, even when both have a 31 January deadline. Submitting a return does not automatically collect the amount due.
Self Assessment Payment on Account Deadline
The first Self Assessment payment on account is normally due by midnight on 31 January, and the second is normally due by midnight on 31 July.
The first payment on account is due on 31 January during the tax year to which it relates. The second payment is due on 31 July after that tax year has ended. HMRC’s Self Assessment payment guidance confirms these as the normal payment dates. Your online account or Self Assessment statement should show the exact amounts due.
For the 2025/26 tax year, the first payment on account was due on 31 January 2026 and the second is due on 31 July 2026. The balancing payment for 2025/26 will normally be due on 31 January 2027 after the return has been completed. On that same January 2027 date, the first payment on account for 2026/27 may also become due. The second payment on account for 2026/27 will normally follow on 31 July 2027.
The principal dates for someone completing a 2025/26 return are therefore:
- 31 July 2026: Second payment on account towards the 2025/26 liability.
- 31 January 2027: Balancing payment for 2025/26, plus the first payment on account for 2026/27 where required.
- 31 July 2027: Second payment on account for 2026/27.
A payment should reach HMRC by the applicable deadline. If a due date falls on a weekend or bank holiday, the processing rule can depend on the payment method. HMRC says most payments should arrive on the previous working day unless an accepted method, such as Faster Payments or an eligible card payment, is treated differently. Allowing extra time is safer than relying on the fastest possible processing period.
How Payments on Account Are Calculated
Each payment on account is normally 50% of the previous year’s relevant Income Tax and Class 4 National Insurance liability after tax deducted at source.
HMRC starts with the relevant liability from the previous tax year. Broadly, this includes Income Tax and Class 4 National Insurance payable through Self Assessment after allowing for tax deducted at source. Each payment on account is normally half of that amount. The two instalments together usually equal 100% of the previous year’s relevant liability.
Suppose a sole trader’s 2025/26 relevant Income Tax and Class 4 National Insurance liability is £6,000. The first payment on account for 2026/27 would normally be £3,000, due on 31 January 2027. The second would normally be another £3,000, due on 31 July 2027. Those payments would provide £6,000 of credit towards the eventual 2026/27 bill.
The calculation can make the first January under the system appear unusually expensive. If the taxpayer has made no earlier payments on account, the January total could include the full £6,000 balancing liability for the completed year plus a £3,000 first payment towards the next year. The total due would therefore be £9,000. The second £3,000 advance instalment would then be due in July.
You can use the self-employed tax calculator to estimate how changing profits may affect Income Tax and National Insurance. However, the official payment amount should be checked through the completed return and HMRC statement. Capital Gains Tax, student loan repayments, prior-year debts and other adjustments can make the overall January balance different from a simple payment-on-account calculation. Keep these components separate when planning cash flow.
First and Second Payments on Account
The first and second payments on account are normally equal, but the January instalment often feels larger because it can be collected alongside a balancing payment.
The first payment on account is part of the 31 January Self Assessment bill. This deadline can include tax still owed for the previous year, the first advance payment for the current year, interest and any other amounts shown on the statement. The first instalment itself is normally 50% of the relevant previous-year liability. It should not be confused with the complete amount due that January.
The second payment on account is normally due on 31 July. It is usually the same amount as the first instalment unless the payments have been formally reduced or another adjustment has been made. No new Self Assessment return is normally due in July. This makes the second payment easier to overlook, particularly when a taxpayer concentrates on the January filing season.
HMRC does not normally send a fresh tax calculation specifically for the July deadline. The amount should already appear on the Self Assessment statement or online account. Add 31 July to the tax calendar as soon as the return is completed. Setting money aside throughout the year can reduce the risk of using funds intended for the second payment.
Balancing Payment Explained
A balancing payment is the amount still owed after HMRC compares the final Self Assessment liability with the payments on account already credited for that year.
When the next return is completed, HMRC calculates the actual tax liability and deducts the two advance payments. If the final relevant bill is higher than the total paid on account, the difference forms part of the balancing payment. According to HMRC’s Self Assessment statement guidance, the statement shows payments made, outstanding amounts and any balancing payment. The balancing amount is normally due on 31 January after the tax year ends.
Suppose two payments on account of £3,000 were made towards 2026/27, creating a total credit of £6,000. If the final relevant liability is £7,400, a further £1,400 is required. Capital Gains Tax, student loan repayments or other charges due for the year may be added separately to the January bill. A new first payment on account for 2027/28 may also be due on the same date.
If the final liability is lower than the payments already made, the account may show an overpayment. HMRC can normally use the credit against other amounts due or issue a repayment, depending on the account position and the instructions on the return. Check that all payments have been allocated before requesting a refund. A missing payment reference can delay the reconciliation.
Is Payment on Account Compulsory for Self Assessment?
Payment on account is compulsory when the statutory conditions apply, but it is not required when the relevant liability is below £1,000 or more than 80% of the tax was collected outside Self Assessment.
You cannot simply opt out because the January total is inconvenient. When the previous return creates payments on account and neither exception applies, the instalments are legally due. Paying only the balancing amount does not cancel the advance charge. Interest can accrue where a required payment is made late.
The requirement can apply even if you expect the next year’s income to fall. In that situation, the correct approach is to submit a reasonable claim to reduce the payments rather than omit them without explanation. HMRC allows reductions when the expected liability is genuinely lower. The claim should reflect the best available estimate of income, expenses, reliefs and tax already deducted.
Payments on account may not be required where employment income forms most of the tax position and PAYE has collected more than 80% of the assessed tax. They may also be absent when the remaining relevant Self Assessment amount is below £1,000. Your statement provides the practical answer for the return already filed. Contact HMRC if the calculation appears inconsistent with the reported figures.
How to Reduce Payments on Account
You can ask HMRC to reduce payments on account when you reasonably expect the current year’s relevant tax liability to be lower than the amount calculated from the previous year.
A reduction may be appropriate when business profits or other taxable income are expected to fall. It can also be relevant when allowable expenses increase, additional tax relief becomes available or more tax will be deducted at source. HMRC allows claims through the online account or by using form SA303. An authorised tax adviser can also make the claim on a taxpayer’s behalf.
According to HMRC guidance on reducing payments on account, a claim must state the revised amount and explain why the reduction is appropriate. The claim deadline is normally 31 January after the end of the tax year concerned. You can reduce the instalments to a lower amount or potentially to nil where the expected relevant liability supports that result. The reduction should be based on a defensible estimate rather than a preferred cash-flow figure.
Reducing the instalments too far can create interest charges. If the final liability shows that more should have been paid on account, HMRC can charge interest on the shortfall from the original payment dates. A taxpayer who becomes aware that the reduction was excessive can make an additional payment before the final return is filed. Updating forecasts during the year can limit the interest period.
A temporary cash shortage is not, by itself, a reason to reduce payments on account when the expected tax liability has not fallen. In that situation, contact HMRC about payment support or a Time to Pay arrangement. Reducing an advance payment and arranging time to pay are different processes. Use the route that matches the actual reason the payment cannot be made.
How to Pay HMRC
Self Assessment can be paid through HMRC-approved online banking, Faster Payments, CHAPS, Bacs, Direct Debit or eligible card methods using the correct 11-character reference.
The official GOV.UK Self Assessment payment service lists the available methods and processing times. Online bank payments, Faster Payments, CHAPS and eligible card payments normally work on the same or next day. Bacs and a previously authorised Direct Debit normally require three working days. A first Direct Debit should be allowed five working days.
The Self Assessment payment reference is normally the taxpayer’s 10-digit Unique Taxpayer Reference followed by the letter K. HMRC describes this as an 11-character reference. Entering an incorrect or incomplete reference can delay allocation. Check the reference in the HMRC online account or on an official paying-in slip before authorising the transaction.
A separate Direct Debit may be needed for a payment on account. HMRC also offers a Budget Payment Plan for taxpayers who want to make weekly or monthly payments towards a future bill before it becomes due. These voluntary payments can help with budgeting, but they do not change the statutory deadline or final liability. Ensure the plan will cover the required amount or pay any remaining balance separately.
The HMRC online payment guide explains the broader payment process. For a payment on account, verify that the amount appears against the correct Self Assessment record after processing. Keep the bank or card confirmation until the online statement updates. Contact HMRC promptly if the payment is missing or allocated incorrectly.
What Happens If You Miss the Deadline?
A late payment on account normally attracts interest from its due date, and unpaid amounts can contribute to further late-payment consequences when the annual Self Assessment balance is settled.
HMRC charges interest on overdue Self Assessment amounts from the relevant due date. The interest rate can change, so an old percentage should not be used for current calculations. Paying as soon as possible limits the period over which interest accumulates. Always check GOV.UK for current interest rates and late-payment guidance.
Late-payment penalties and payment-on-account charges can interact differently depending on the liability and penalty regime. Under the established Self Assessment rules, penalties of 5% can apply to qualifying unpaid amounts at 30 days, six months and 12 months, while interest is charged separately. HMRC’s internal guidance states that the balancing-payment penalty calculation can include unpaid payments on account for that year. Taxpayers within Making Tax Digital for Income Tax may be subject to a newer penalty framework, and HMRC states that its new late-payment penalties do not apply directly to payments on account.
Late filing penalties are separate from payment consequences. Filing the return on time does not prevent interest where tax is paid late, and paying an estimated amount does not prevent a filing penalty when the return is overdue. Keep separate records for the return deadline, balancing payment and both payments on account. This prevents one completed task from being mistaken for the whole Self Assessment obligation.
If you cannot pay, contact HMRC before the position escalates. A Time to Pay arrangement may allow the debt to be cleared through affordable instalments based on the taxpayer’s circumstances. Interest generally continues on the outstanding amount. Keeping to an accepted arrangement can prevent some further late-payment penalties that would otherwise arise during the arrangement period.
Common Payment on Account Mistakes
Common mistakes include overlooking the July instalment, confusing the balancing payment with the full January bill, reducing payments without evidence and using the wrong HMRC reference.
The first common mistake is assuming the January total relates only to the year just completed. It can include the balancing payment and the first advance instalment for the following year. Read the statement line by line before concluding that HMRC has duplicated the bill. The advance amount will be credited against the next return.
Forgetting the 31 July payment is another frequent problem. No tax return is normally due that day, so the deadline can pass without the same publicity surrounding January. Record the date when the first payment on account is created. Check the balance again before July in case an adjustment has changed the amount.
Reducing payments without a realistic estimate can create an avoidable interest charge. A fall in turnover does not always produce the same fall in taxable profit, particularly if business expenses also decrease. Include other income, Class 4 National Insurance, reliefs and tax deducted at source in the forecast. Revise the claim or make a top-up payment if the position improves.
Using the 10-digit UTR without the final K can delay a payment. A saved bank payee may also contain an incorrect reference belonging to another taxpayer or tax type. Check all 11 characters before each transfer. The reference for Self Assessment should not be confused with Corporation Tax, PAYE or VAT payment references.
Finally, some taxpayers spend money reserved for the July instalment because the amount remains in their business account after January. Payments on account are part of the annual cash-flow cycle rather than an unexpected HMRC charge. Maintaining a separate tax reserve can make both deadlines easier to manage. Update the reserve whenever expected profit changes.
Final Thoughts
The key Self Assessment payment on account deadlines are normally 31 January and 31 July, with the January bill potentially including both a balancing payment and the next year’s first advance instalment.
Payments on account become easier to manage when each part of the cycle is separated. Check the balancing liability, first payment on account and second payment on account as individual amounts. Confirm the dates through the HMRC statement and allow enough processing time for the chosen payment method. Keep the correct UTR-based reference with the transaction record.
If income is expected to fall, prepare a reasonable forecast and submit a formal reduction claim rather than simply paying less. If the liability has not fallen but payment is unaffordable, contact HMRC about payment support. Review the position throughout the year so an excessive reduction can be corrected early. Current HMRC guidance should take priority whenever deadlines, payment methods, interest or penalty rules change.
This guide provides general information about Self Assessment payments on account for 2026/27. Individual circumstances vary. For personalised advice about your specific situation, consult a qualified tax adviser or contact HMRC directly. Always check GOV.UK for current deadlines, interest rates and guidance.
Written by
Daniel Reed
Daniel Reed writes about PAYE, payslips, tax codes, workplace deductions and take-home pay in the UK.
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