Can I reduce my payments on account?
Yes. If you expect a lower bill, you can ask HMRC to reduce your payments on account. Sign in to your online account, view your latest return and select Reduce payments on account, or send form SA303 to your tax office. If your final bill is higher, you will be charged interest on the difference.
Figures checked against gov.uk on . General information, not tax advice.
When it makes sense
Each payment on account is normally based on last year's tax, so a fall in profit, a loss of income or a large one-off bill last year can leave you paying far more in advance than you will owe. Reducing them keeps that cash in the business until the balancing payment.
The risk
gov.uk warns that if you reduce the payments and your final bill turns out higher, you will be charged interest on the difference. Be realistic about the year, and if you are unsure, leave the payments as they are and let the balancing payment sort it out.
You can only reduce payments that apply; if last year's bill was under £1,000, or you paid more than 80% outside Self Assessment, you have none to reduce.