Payments on Account are advance payments towards your next year’s Self Assessment tax bill. HMRC requires you to make them if your tax bill is more than £1,000 and less than 80% of your total tax was deducted at source through PAYE. Each payment is half of your previous year’s tax bill. The first payment is due on 31 January and the second on 31 July. For example, if your 2024/25 tax bill was £4,000, you would make two payments of £2,000 — one in January 2026 and one in July 2026 — towards your 2025/26 bill. When you file your 2024/25 return in January 2026, any difference is either paid or refunded. You can apply to reduce payments on account if you expect your income to be lower.
