{"id":132,"date":"2019-05-28T14:13:19","date_gmt":"2019-05-28T13:13:19","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=132"},"modified":"2025-09-03T17:30:22","modified_gmt":"2025-09-03T16:30:22","slug":"what-is-a-payment-on-account","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/self-assessment-basics\/what-is-a-payment-on-account\/","title":{"rendered":"How does Payment on Account work?"},"content":{"rendered":"\n<p><a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/payment-on-account\/\" target=\"_blank\" rel=\"noreferrer noopener\">Payment on Account<\/a> means that you pay tax in\u00a0<strong>two instalments<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>First in January (<a href=\"https:\/\/taxfix.com\/en-uk\/uk-tax-year-dates-and-filing-deadlines\/\">the usual deadline for paying the tax bill for last year<\/a>)<\/li>\n\n\n\n<li>Second in July<\/li>\n<\/ul>\n\n\n\n<p>It&#8217;s usually the <strong>self-employed<\/strong> (and very rarely landlords) who have to use Payment on Account.<\/p>\n\n\n\n<p>If you&#8217;ve already paid more than 80% of your tax bill by January, don&#8217;t worry about Payments on Account. You won&#8217;t be charged again in July.<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-neutral m-align-left\">\n    <div class=\"b-block-body\">\n        <p><span style=\"font-weight: 400;\">Key dates in the current <\/span><b>2025\/26 tax year \ud83d\udc47<\/b><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Deadline<\/b><\/td>\n<td><b>Date<\/b><\/td>\n<td><b>Year<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Tax year starts<\/span><\/td>\n<td><span style=\"font-weight: 400;\">6th April<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2025<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Tax year ends<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5th April<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2026<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Register for self assessment<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5th October<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2026<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Pay tax bill by PAYE salary<\/span><\/td>\n<td><span style=\"font-weight: 400;\">30th December<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2026<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Self assessment deadline<\/span><\/td>\n<td><span style=\"font-weight: 400;\">31st January<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2027<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n\n<h2 class=\"wp-block-heading\">Why is my first Payment on Account so high?<\/h2>\n\n\n\n<p>Basically, in your first year of self-employment, you pay 150% of your tax bill in one go.<\/p>\n\n\n\n<p>Here&#8217;s how this would work out in practise. <\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Your tax bill for is \u00a35,000<\/li>\n\n\n\n<li>You&#8217;ll need to pay this in full by the self assessment deadline plus an advance payment of \u00a32,500 (50% of \u00a35,000) <\/li>\n\n\n\n<li>You pay the remaining 50% (\u00a32,500) by July 31st<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\">What if my income is less next year?<\/h2>\n\n\n\n<p>You can&nbsp;<strong>ask HMRC to reduce your payment.<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.gov.uk\/log-in-register-hmrc-online-services\" target=\"_blank\" rel=\"noreferrer noopener\">Log in to your HMRC online account<\/a> and select \u201cReduce Payments on Account\u201d<\/li>\n\n\n\n<li>download, print, and send&nbsp;<a href=\"https:\/\/www.gov.uk\/government\/publications\/self-assessment-claim-to-reduce-payments-on-account-sa303\" target=\"_blank\" rel=\"noreferrer noopener\">the SA303 form<\/a>&nbsp;to your tax office.<\/li>\n<\/ul>\n\n\n\n<p>However, we recommend you pay the Payment on Account as it is. If your profits are indeed down, then&nbsp;<strong>HMRC will refund you the difference<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What if my income is higher next year?<\/h2>\n\n\n\n<p>You will be required to make a&nbsp;<strong>balancing payment<\/strong>&nbsp;by January 31st next year so your account is up to date.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to check what to pay<\/h2>\n\n\n\n<p><a href=\"https:\/\/www.gov.uk\/log-in-register-hmrc-online-services\" target=\"_blank\" rel=\"noreferrer noopener\">Log in to your online account<\/a>&nbsp;and click \u201cView statements\u201d.<\/p>\n\n\n\n<p>You can find information on payments you\u2019ve made already or your next payments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is it optional?<\/h2>\n\n\n\n<p>No.<\/p>\n\n\n\n<p>Once you submit your Self Assessment tax return,&nbsp;<strong>you are automatically enrolled<\/strong>.<\/p>\n\n\n\n<p>The only exceptions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You\u2019ve already paid&nbsp;<strong>80% or more<\/strong>&nbsp;of the total tax amount you owe (for example, through&nbsp;<strong>PAYE<\/strong>)<\/li>\n\n\n\n<li>Your tax bill from Self Assessment was under&nbsp;<strong>\u00a31,000<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>If you <strong>don&#8217;t<\/strong> pay tax through PAYE, you&#8217;re self-employed and your tax bill is more than \u00a31,000, you&#8217;ll have to pay tax again in July.<\/p>\n\n\n\n<p>Here&#8217;s a visual guide to help you understand a little better.<\/p>\n\n\n<div class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_Self-Assessment_Payment-on-account-1440x2880.png\" width=\"1440\" height=\"2880\" srcset=\"https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_Self-Assessment_Payment-on-account-150x300.png 150w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_Self-Assessment_Payment-on-account-512x1024.png 512w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_Self-Assessment_Payment-on-account-768x1536.png 768w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_Self-Assessment_Payment-on-account-1024x2048.png 1024w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_Self-Assessment_Payment-on-account-1440x2880.png 1440w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_Self-Assessment_Payment-on-account-scaled.png 1280w\" class=\"wp-block-image__media\" sizes=\"auto, (min-width: 1000px) 768px, calc(100vw - 48px)\" alt=\"payment on account\"><\/div>","protected":false},"excerpt":{"rendered":"<p>Payment on Account means that you pay tax in\u00a0two instalments: It&#8217;s usually the self-employed (and very rarely landlords) who have to use Payment on Account. If you&#8217;ve already paid more than 80% of your tax bill by January, don&#8217;t worry about Payments on Account. You won&#8217;t be charged again in July. Why is my first [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[439,435],"tags":[348,411],"class_list":["post-132","post","type-post","status-publish","format-standard","hentry","category-registration-and-filing-your-tax-return","category-self-assessment-basics","tag-income-tax","tag-self-employed"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How does Payment on Account work? &#8211; Taxfix (formerly TaxScouts)<\/title>\n<meta name=\"description\" content=\"If you&#039;re wondering what Payment on Account is and whether you have to use it, read more about what it is, who uses it and why right here.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/taxfix.com\/en-uk\/self-assessment-basics\/what-is-a-payment-on-account\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How does Payment on Account work? 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