Payments on account
'Payments on account' are advance payments towards your tax bill (including Class 4 National Insurance if you're self-employed).
You have to make 2 payments on account every year unless:
- your last Self Assessment tax bill was less than £1,000
- you've already paid more than 80% of all the tax you owe, eg through your tax code or because your bank has already deducted interest on your savings
Each payment is half your previous year's tax bill. Payments are due by midnight on 31 January and 31 July.
If you still have tax to pay after you've made your payments on account, you must make a 'balancing payment' by midnight on 31 January next year.
Your bill for the 2013 to 2014 tax year is £3,000. You made 2 payments on account last year of £900 each (£1,800 in total).
The total tax to pay by midnight on 31 January 2015 is £2,700. This includes:
- your 'balancing payment' of £1,200 for the 2013 to 2014 tax year (£3,000 minus £1,800)
- the first payment on account of £1,500 (half your 2013 to 2014 tax bill) towards your 2014 to 2015 tax bill
You have to pay your second payment on account of £1,500 by midnight on 31 July 2015.
If your tax bill for 2014 to 2015 is more than £3,000 (the total of your 2 payments on account), you'll need to make a 'balancing payment' by 31 January 2016.
Check your payments on account
See your Self Assessment statement by logging in to your online account and clicking 'View statements'. You'll see:
- payments on account you've already made
- payments you need to make towards your next tax bill
Reduce your payments on account
If you know your tax bill is going to be lower than last year, you can ask HM Revenue and Customs (HMRC) to reduce your payments on account. Either:
HMRC will send you a refund if the payments on account you've made are higher than your tax bill.