Was it below £1,000?
You normally do not need payments on account if the previous year’s relevant Self Assessment liability was less than £1,000. This is a tax-bill test, not a turnover or profit threshold.
Payments on account can make your HMRC statement look higher than expected. If you are wondering why, you are in the right place.
We will help you understand what the figures mean, which tax year they belong to and what to do next. No judgement, no assumption that you should already know.
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Payments on account are advance instalments towards your Self Assessment tax bill. They are normally based on the previous year’s relevant tax liability, including Class 4 National Insurance where applicable.
They spread advance payments across the tax year and the following July.
Each instalment is half the previous year’s relevant liability, unless adjusted.
The usual deadlines are 31 January and 31 July.
No. An advance payment is credited towards the tax year it covers. When the actual bill is calculated, amounts already paid are taken into account. You may then owe a balance, or have an overpayment.
Not everyone who files a tax return needs to pay in advance. These are the main checks.
You normally do not need payments on account if the previous year’s relevant Self Assessment liability was less than £1,000. This is a tax-bill test, not a turnover or profit threshold.
You normally do not need them if more than 80% of the relevant tax was collected outside Self Assessment, such as through PAYE. Having a PAYE job does not, by itself, settle the question.
The calculation generally uses Income Tax and Class 4 National Insurance after relevant deductions. Capital Gains Tax, student and postgraduate loan repayments, and Class 2 National Insurance are excluded from the advance-payment calculation.
The exclusions above do not mean those amounts can be ignored when paying your overall bill. If your statement combines several charges, we can help separate them.
January can include the tax you still owe for one year and an advance towards another. Seeing those amounts separately makes a big difference.
Imagine your qualifying tax bill for 2025/26 is £2,400, with nothing already paid towards it. You also need payments on account for 2026/27. Each advance instalment is £1,200: half of £2,400.
| Payment deadline | What you are paying | Total due |
|---|---|---|
| 31 January 2027 | £2,400 to settle 2025/26 + £1,200 first advance for 2026/27 | £3,600 |
| 31 July 2027 | £1,200 second advance for 2026/27 | £1,200 |
Illustration only. This assumes the full £2,400 qualifies for payments on account, no earlier payments or other credits, no reduction, and no separate charges such as Capital Gains Tax or loan repayments. Your first January payment is not always 150% of your headline bill.
For 2026/27, the £2,400 already paid leaves a £600 balancing payment. Assuming the same rules apply, the first advance for 2027/28 would be £1,500: half of £3,000.
On 31 January 2028, that would mean £600 plus £1,500: £2,100 in total. The £600 settles the old year; the £1,500 starts paying the next one.
For the 2026/27 tax year, the usual instalment dates are:
Your first payment on account for 2026/27. Any remaining 2025/26 balance is normally due on this date too.
Your second payment on account for 2026/27. Do not mistake July for a new tax-return filing deadline.
Check your own HMRC statement for the exact amounts and any other charges. Allow time for your chosen payment method to reach HMRC. See our Self Assessment deadline guide.
Yes, if you reasonably expect the relevant tax liability for the year to be lower. The right figure needs a forecast, not a guess.
Consider the whole tax year and all relevant income. One quiet month does not necessarily mean a lower annual bill.
You can claim through your HMRC online account or use form SA303. Keep the figures supporting your estimate and review them if circumstances change.
We can help you assess an appropriate amount before a claim is made, within an agreed engagement.
If you reduce too far, HMRC can charge interest on the resulting shortfall from the original payment dates. Difficulty finding the money is not, on its own, a reason to claim that less tax is due.
Please do not leave the worry unopened. The next step depends on whether the bill is too high or the cash is too tight.
| Your situation | What to explore | Important distinction |
|---|---|---|
| Your expected tax liability is lower | A supported claim to reduce payments on account. | Changes the advance amount, not the final tax calculation. |
| You want to save towards a future bill | HMRC’s Budget Payment Plan: regular weekly or monthly Direct Debits. | You must be up to date with previous Self Assessment payments. Any shortfall remains due by the normal deadline. |
| You cannot pay what is due on time | A possible Time to Pay arrangement with HMRC. | HMRC considers eligibility and affordability. Approval is not automatic, and interest may still apply. |
Contact HMRC promptly if a payment is overdue or you expect to miss it. We can help you understand your position and prepare the figures for that conversation. A chat with us does not itself change an HMRC deadline or put a payment arrangement in place.
Good support is not just explaining a bill once it arrives. It is helping you prepare while you still have choices.
Compare your tax calculation with your HMRC statement and payment records. A calculation shows the liability; the account also shows payments, credits and outstanding amounts.
Our SA302 guide explains the tax calculation.
Work from expected profit, other income, deductions and upcoming instalments. A blanket percentage of turnover can be misleading. Review the plan when income changes.
Preparing the return earlier gives you time to understand the figures and budget. Filing early does not bring forward the usual 31 January payment deadline.
You do not need a perfectly organised folder to start a conversation.
Behind the tax bill is your working life, your household budget and the things you are trying to build. We want to understand those things too.
Tell us what has arrived, what has changed and what is keeping you up at night.
That may mean checking a statement, preparing a return, forecasting the year or reviewing a reduction claim.
Your first chat is free. If you want us to carry out work, we agree what is included and the fee before you decide to go ahead.
Your latest HMRC statement, the relevant tax year, a note of payments already made and a rough picture of how your income has changed. Missing something? We can still start by discussing your question.
Please do not put HMRC passwords, bank details or National Insurance numbers in a general enquiry. We can arrange an appropriate way to share documents if needed.
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Yes. Look at the complete tax position, including untaxed profits, rent or dividends. PAYE deductions are taken into account, but being employed does not automatically exempt you. The relevant £1,000 and more-than-80% tests still need checking.
CIS deductions are advances towards your tax and National Insurance, not a final calculation. Include them correctly in your return. They may reduce what remains due or result in a refund, but do not assume every subcontractor is exempt from payments on account.
They are excluded from the payments-on-account calculation. That does not remove the separate liability. Check when each amount must be paid, especially where a property disposal has its own reporting and payment rules.
Review the year’s expected liability, including income earned before you stopped and any other taxable income. A reduction may be appropriate, but do not simply cancel a payment or assume the statement will update itself. Deal with any remaining filing requirements too.
Once the final liability is established, an overpayment may be refunded or set against amounts you owe. Check the account before expecting cash back: other outstanding liabilities and HMRC checks can affect the outcome.
No. Making Tax Digital changes how affected individuals keep records and report income; it does not make an existing payment on account disappear. Check both your reporting timetable and the payment dates in your HMRC account.
Yes, you can still ask us about the figures or a payment you do not understand. We will discuss what needs reviewing, which records we need and any fee before starting chargeable work. You do not need to pretend that everything makes sense.
Whether this is your first tax bill, a difficult year or simply a figure you cannot make sense of, we are here to listen. Start with your question. We will talk through how we can help.
Completely free first chat. No obligation. Any further work agreed with you first.
Guidance checked: 8 October 2026. This is a general guide, not advice on your individual tax position. Examples are illustrative. Check your own HMRC account and seek advice where your circumstances differ. Photography is illustrative and does not depict Swift clients or team members.
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