What are payments on account?
Payments on account are advance payments towards your next Self Assessment tax bill, including Class 4 National Insurance if you are self-employed. You make two, each usually half of last year's tax bill, due by midnight on 31 January and 31 July. You can skip them if last year's bill was under £1,000.
Figures checked against gov.uk on . General information, not tax advice.
At a glance
- Due dates
- Midnight on 31 January and 31 July
- Each payment
- Usually half of last year's tax bill
- Not needed if
- Last year's bill was under £1,000, or you paid more than 80% outside Self Assessment
gov.uk's worked example
Take a 2023 to 2024 bill of £3,000. If you had already made two payments on account of £900 each, you owe a balancing payment of £1,200 plus a first payment on account of £1,500 for 2024 to 2025, so £2,700 by 31 January 2025, then a second £1,500 on 31 July 2025.
If you had made no payments on account the year before, gov.uk says the total due by midnight on 31 January 2025 would be £4,500: the £3,000 bill plus the £1,500 first payment on account. This is why a first January bill can look so large.
When you do not make them
You do not make payments on account if the tax you owed last year was less than £1,000, or if you paid more than 80% of last year's tax outside Self Assessment, for example through your tax code.
They are a way of paying tax in advance, not an extra tax. If your income is higher than the estimate, you owe a balancing payment; if you expect it to be lower, you can ask HMRC to reduce them.