Understand your Self Assessment tax bill

2. Payments on account

‘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’ve already paid more than 80% of all the tax you owe, for example through your tax code or because your bank has already deducted interest on your savings

Each payment is half your previous year’s tax bill. Payments are 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.

Example

Your bill for the 2016 to 2017 tax year is £3,000. You made 2 payments on account last year of £900 each (£1,800 in total).

The total tax to pay by midnight on 31 January 2018 is £2,700. This includes:

  • your ‘balancing payment’ of £1,200 for the 2016 to 2017 tax year (£3,000 minus £1,800)
  • the first payment on account of £1,500 (half your 2016 to 2017 tax bill) towards your 2017 to 2018 tax bill

You have to pay your second payment on account of £1,500 by midnight on 31 July 2018.

If your tax bill for the 2017 to 2018 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 2019.

Payments on account don’t 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

See your Self Assessment statement by logging in to your online account and clicking ‘View statements’. You’ll 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. Either:

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.