The Payments on Account Calculator helps estimate the advance payments that may be due towards a future UK Self Assessment bill. Payments on account are normally collected in two instalments and are generally based on the relevant Self Assessment liability for the preceding tax year.

Use the figures requested by the calculator to estimate each payment on account and understand how a balancing payment may affect the total due in January. The result can help sole traders, landlords and other Self Assessment taxpayers plan for upcoming payment dates.

The calculation is illustrative. Your actual liability depends on the figures in your tax return, tax already deducted at source, previous payments, adjustments and HMRC account records.

How Does the Payments on Account Calculator Work?

The calculator uses the relevant Self Assessment liability entered to estimate two equal payments on account and any associated balancing amount.

Each payment on account is normally 50% of the relevant previous year’s liability. The first instalment is due by 31 January during the tax year to which it relates, and the second is due by 31 July after that tax year has ended.

For example, a relevant liability of £6,000 would normally produce:

a first payment on account of £3,000;
a second payment on account of £3,000; and
total payments on account of £6,000.

The calculator may also compare the final liability for a completed tax year with payments on account already made towards that year. Any remaining amount is the balancing payment.

HMRC provides further guidance on how Self Assessment payments on account work. Your Self Assessment statement or online account remains the appropriate source for the amounts HMRC expects you to pay.

What Do the Calculator Results Mean?

The results estimate each advance instalment, the total payments on account and any balancing payment arising from the figures entered.

First payment on account: This is normally half of the relevant liability for the preceding tax year. It is due on 31 January and is paid towards the current tax year.

Second payment on account: This is normally the same amount as the first instalment. It is due on 31 July following the end of the relevant tax year.

Balancing payment: This is the difference between the final relevant liability for a completed tax year and the payments on account already credited to that year. It is generally due on the following 31 January.

Total due in January: Where applicable, the January amount can include both a balancing payment for the completed year and the first payment on account for the following year. It may therefore be substantially larger than either payment viewed separately.

The calculator result is not an HMRC demand or statement. It may not include interest, penalties, older debts, voluntary payments, refunds or changes that HMRC has not yet processed.

What Is an Illustrative Payments on Account Calculation?

This illustrative example shows how a balancing payment and new payments on account can combine at the January deadline.

Illustrative example: A sole trader’s final relevant Self Assessment liability for the completed tax year is £6,000. They previously made two payments on account of £2,000, totalling £4,000, towards that liability.

The example assumes the £6,000 is the relevant amount used for payments on account, both earlier instalments were paid and correctly allocated, no reduction claim applies, less than 80% of the liability was collected outside Self Assessment, and there are no interest charges, penalties or other outstanding amounts.

Calculation	Illustrative working	Amount
Final liability for completed year	Entered liability	£6,000
Payments on account already made	£2,000 + £2,000	£4,000
Balancing payment	£6,000 − £4,000	£2,000
First new payment on account	50% × £6,000	£3,000
Total due in January	£2,000 + £3,000	£5,000
Second new payment on account	50% × £6,000	£3,000

Based on these assumptions, the estimated amount due in January is £5,000, followed by £3,000 in July. The two new instalments provide £6,000 towards the next tax year’s liability.

If the next year’s final relevant liability is more than £6,000, the taxpayer may owe another balancing payment. If it is lower, the excess may reduce the amount payable or result in an overpayment, subject to HMRC’s records.

When Are Payments on Account Required?

Payments on account are normally required when the relevant previous year’s Self Assessment liability is at least £1,000 and no more than 80% was collected outside Self Assessment.

You will not normally be required to make payments on account if either:

the relevant amount owed for the preceding year was less than £1,000; or
more than 80% of the tax due was collected outside Self Assessment, such as through PAYE or other tax deducted at source.

A taxpayer with exactly £1,000 of relevant liability may still be required to make payments on account if the tax-collected-at-source test does not provide an exemption.

The requirement is based on the relevant liability rather than turnover, gross income or business profit alone. A person can have substantial income but no payments on account if sufficient tax was deducted before reaching Self Assessment.

HMRC normally calculates the instalments when processing the return. Check the amounts and deadlines shown in your Self Assessment account even if the calculator indicates that no payments should be required.

Which Taxes Are Included in Payments on Account?

Payments on account generally cover Income Tax and Class 4 National Insurance included in the relevant Self Assessment calculation.

The calculation takes account of relevant tax deducted at source. This can include PAYE deductions or Construction Industry Scheme deductions where they are available to set against the Self Assessment liability.

Capital Gains Tax and student loan repayments are not normally included when calculating payments on account. Amounts due for these may instead form part of the balancing amount payable after the tax return has been completed.

Other charges, reliefs and tax adjustments can affect the amount shown by HMRC. The calculator cannot determine the correct underlying tax liability from turnover or profit alone unless those calculations form part of its stated inputs.

Self-employed users who still need to estimate their underlying Income Tax and Class 4 National Insurance can use the Self-Employed Tax Calculator before reviewing potential payments on account.

What Is a Balancing Payment?

A balancing payment is the amount still owed after payments on account are deducted from the final liability for the completed tax year.

The balancing payment is normally due by 31 January following the end of the tax year. It can arise when the final liability is higher than the advance payments previously made.

For example, if the final relevant liability is £7,000 and the taxpayer made £6,000 in payments on account, the balancing payment would be £1,000, subject to any other amounts or adjustments on the account.

The same £7,000 liability may also be used to calculate the next pair of payments on account. Each new instalment would normally be £3,500, so the January amount could include the £1,000 balancing payment and the £3,500 first instalment.

If the earlier payments exceed the final liability, there may be an overpayment. HMRC may allocate this against other liabilities or make a repayment, depending on the taxpayer’s account and instructions.

Why Can the January Payment Be Higher Than Expected?

The January total can include the previous year’s balancing payment and the first advance payment towards the following tax year.

This is particularly noticeable when a person first enters the payments-on-account system. If no advance payments were made towards the completed year, they may have to pay the full tax bill plus another 50% as the first instalment for the next year.

For example, an illustrative £4,000 first Self Assessment liability could result in £6,000 being due in January: the £4,000 completed-year bill plus a £2,000 first payment on account. A further £2,000 would normally be due in July.

This does not mean the same tax has been charged twice. The £4,000 settles the completed year, while the two £2,000 instalments are advance payments towards the following year.

Check which tax year each amount relates to when comparing the calculator result with HMRC’s statement.

Can Payments on Account Be Reduced?

You can apply to reduce payments on account if you reasonably expect the relevant liability for the new tax year to be lower than the amount on which HMRC based the instalments.

A reduction may be appropriate where:

business profits or other taxable income are expected to fall;
allowable expenses or tax reliefs are expected to increase;
more tax will be deducted through PAYE or another source;
a business has stopped trading; or
the previous year included income that is unlikely to recur.

You can apply through your HMRC online account or use form SA303. GOV.UK explains how to claim to reduce payments on account.

A valid adjustment normally changes both payments to equal amounts. Reducing the total below £1,000 does not necessarily remove the adjusted payments once a claim has been made.

Use a realistic estimate. If payments are reduced too far and the final liability is higher, HMRC can charge interest on the underpaid amounts from their original due dates. Penalties may also be relevant where a reduction claim is made fraudulently or negligently.

What Factors Can Affect the Calculation?

The previous liability, tax deducted at source, earlier instalments, changes in income and HMRC adjustments can all affect the amounts payable.

Relevant previous-year liability: The new instalments are normally based on this amount.
Payments already made: Earlier payments on account reduce the balancing amount for the year to which they relate.
Tax deducted at source: PAYE, CIS and other deductions can affect the relevant liability and whether payments are required.
Changing profits or income: A higher or lower final liability can create a balancing payment or overpayment.
Reliefs and allowances: Changes in entitlement can alter the final tax calculation.
Capital gains and student loans: These may increase the January balancing amount without increasing the payments-on-account basis.
Amended returns: An amendment can cause HMRC to recalculate payments and account balances.
Interest and penalties: Late or insufficient payments can make the amount shown in the HMRC account higher than the calculator estimate.
Reduction claims: An accepted claim can replace the automatically calculated instalments with lower equal amounts.

The calculator applies the figures entered but cannot check whether each amount has been reported, paid or allocated correctly by HMRC.

What Common Payments on Account Mistakes Should Be Avoided?

Common mistakes include treating advance payments as duplicate tax, using the wrong liability and overlooking the combined January amount.

Using turnover or gross income

Payments on account are based on the relevant Self Assessment liability, not gross sales or total income.

Calculate or obtain the appropriate tax and Class 4 National Insurance figure before using it as the basis for the instalments.

Forgetting payments already made

Previous payments on account should be deducted when estimating the balancing payment for the completed year.

Check the relevant tax year and HMRC allocation rather than assuming every payment on the account belongs to the liability being calculated.

Including Capital Gains Tax in the instalment basis

Capital Gains Tax is not normally used to calculate payments on account.

It may still increase the amount due at the January deadline, so distinguish the total payment required from the amount used to calculate the next two instalments.

Assuming the July payment is optional

The second payment on account remains due on 31 July unless HMRC has reduced or otherwise adjusted it.

Paying the first instalment does not settle the second one automatically.

Reducing instalments without a reasonable forecast

An excessive reduction can lead to interest when the final tax return establishes a higher liability.

Base a reduction on a supportable estimate of income, deductions, reliefs and tax collected at source.

Relying on an SA302 alone

The SA302 tax calculation does not necessarily show payments already credited or every amount currently outstanding.

Review the Self Assessment statement or online account to check payments, allocations and the balance HMRC expects.

What Are the Calculator’s Important Limitations?

The calculator estimates the standard payment pattern but cannot reproduce every adjustment or transaction recorded on an HMRC account.

The result may differ from HMRC’s figure where there are:

amended or corrected tax returns;
payments allocated to another tax year;
overpayments or refunds awaiting processing;
reduced payment claims;
PAYE, CIS or other tax deducted at source;
Capital Gains Tax or student loan amounts;
late-payment interest or penalties;
older Self Assessment debts;
Time to Pay arrangements; or
other charges and credits on the taxpayer’s account.

The calculator does not establish whether a person must file a Self Assessment return or calculate the underlying taxable profit unless that function is expressly included in the calculator itself.

Payment dates do not normally change when instalments are reduced. If a deadline falls close to the date of calculation, allow enough time for the chosen payment method to reach HMRC.

Which Related Calculators May Be Useful?

Related calculators can help estimate the tax liability that may lead to payments on account.

Sole traders can use the Self-Employed Tax Calculator to estimate Income Tax, Class 4 National Insurance and take-home income before considering the payment timetable.

Taxpayers with employment, pension or other personal income can use the Income Tax Calculator for a broader tax estimate. The result should be reviewed carefully because payments on account use the relevant Self Assessment liability after applicable tax deducted at source, not simply the total tax calculated on all income.

This Payments on Account Calculator provides estimates only. Actual amounts depend on the figures entered, HMRC’s calculation, payments and credits already recorded, tax deducted at source, adjustments, interest and other account activity. Individual circumstances, allowances and reliefs differ, and professional tax advice may be appropriate where the liability or payment allocation is uncertain.

Payments on Account Calculator UK

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