UK payments on account guide: 31 January and 31 July 2027

The short version

• What: two advance payments towards your next tax bill, covering Income Tax and Class 4 National Insurance.
• How much: each is half of last year's bill, after tax already taken at source.
• When: by midnight on 31 January and 31 July. The rest of last year's bill (the balancing payment) is also due on 31 January.
• Who doesn't pay them: people whose last Self Assessment bill was under £1,000, or who had more than 80% of their tax collected at source.
• Not included: Capital Gains Tax, student loan repayments and Class 2 National Insurance. These go in the balancing payment.
• First year shock: you pay the whole of last year's bill plus half of it again in January.
• 2027 dates: 31 January 2027 is a Sunday and 31 July 2027 is a Saturday, so pay early unless you pay by card or Faster Payments.

What are payments on account?

GOV.UK describes payments on account as "payments towards your next tax bill (including Class 4 National Insurance if you're self-employed)". They spread the cost of your tax over two instalments instead of one big bill after the tax year ends. HMRC works them out from your last tax return, on the basis that this year's income will probably be about the same as last year's.

For the 2026-27 tax year (6 April 2026 to 5 April 2027), the payments on account are due by 31 January 2027 and 31 July 2027, and each is normally half of your 2025-26 bill. When you file your 2026-27 return, the real bill is compared with what you've paid, and the difference is settled on 31 January 2028.

Who has to make them

You must make two payments on account unless either:

• the tax you owed through Self Assessment last year was less than £1,000, or
• last year you paid more than 80% of the tax you owed outside Self Assessment, for example through your tax code or because your bank had already taken tax off your savings interest.

Both tests use the tax left to pay after anything taken at source, so most employees and pensioners who only file a return for a small extra amount don't have to make them. Sole traders, partners and landlords with no other job usually do once their bill reaches £1,000. Your Self Assessment statement or HMRC online account shows whether you need to make them and how much they are.

How much each payment is

Each payment on account is 50% of last year's Income Tax and Class 4 National Insurance, after taking off tax deducted at source (such as PAYE on a job or pension). If the total has an odd penny, HMRC puts it on the second payment.

Some things are not included in payments on account. You pay them in full with the balancing payment instead:

• Capital Gains Tax
• Student loan and Postgraduate Loan repayments collected through Self Assessment
• Class 2 National Insurance. Most self-employed people no longer have to pay it: with profits of £7,105 or more it's treated as paid, and below that you can choose to pay voluntary Class 2 (£3.65 a week in 2026-27).

The balancing payment

After the tax year ends, you file your return and HMRC compares the actual bill with the payments on account you've made. If they didn't cover it, you pay the rest as a balancing payment by midnight on 31 January after the end of the tax year. It also includes anything you owe for Capital Gains Tax or student loans.

So on 31 January you usually pay two things at once: the balancing payment for the year that ended the previous April, and the first payment on account for the current year. If you paid too much on account, the extra shows as a credit on your statement and you may be able to claim a refund.

GOV.UK's example: your bill is £3,000 and you made two payments on account of £900 (£1,800). By 31 January you pay a £1,200 balancing payment plus a first payment on account of £1,500, so £2,700, then £1,500 on 31 July.

Worked examples

These use round numbers and the same code as our payments on account calculator, which follows the rules above. They assume the 2026-27 bill isn't reduced unless stated.

1. Your first year: the January "double" payment
Sam started self-employment in 2025-26 and files a first tax return. The Income Tax and Class 4 National Insurance for 2025-26 comes to £6,000, and no tax was taken at source. Sam made no payments on account for 2025-26, so by 31 January 2027 the whole £6,000 is due, plus the first payment on account for 2026-27 of £3,000 (half of £6,000). That's £9,000 on 31 January 2027, then the second payment on account of £3,000 by 31 July 2027. In total Sam pays one and a half years' worth of tax within six months.

2. Your second year: the balancing payment
Sam's 2026-27 bill turns out to be £7,000. The two payments on account already made (£6,000) are taken off, leaving a balancing payment of £1,000. The first payment on account for 2027-28 is half of £7,000, so £3,500. On 31 January 2028 Sam pays £1,000 + £3,500 = £4,500, then £3,500 on 31 July 2028.

3. Student loan on top
Same as example 1, but Sam also owes £800 in student loan repayments through Self Assessment. The student loan goes into the balancing payment only, so 31 January 2027 is £9,000 + £800 = £9,800. The payments on account stay at £3,000 each, because student loan repayments (like Capital Gains Tax and Class 2 National Insurance) aren't included in them.

4. Mostly taxed through PAYE
Priya has a job and a small side business. Her total Income Tax for 2025-26 is £10,000, and £8,500 (85%) was taken from her wages through PAYE. More than 80% of her tax was collected at source, so she doesn't have to make payments on account, even though the £1,500 left is over £1,000. She pays £1,500 by 31 January 2027 and nothing on 31 July 2027.

5. A small bill
Alex's 2025-26 Self Assessment bill is £900. That's under £1,000, so there are no payments on account: Alex pays £900 by 31 January 2027 and nothing on 31 July.

Try your own numbers

The first-year January shock

Your first Self Assessment bill is the one that catches most people out. With no payments on account made the year before, the whole bill is due on 31 January, and so is the first payment on account for the year you're already in. GOV.UK's own example is a £3,000 bill that becomes £4,500 to pay on 31 January, then another £1,500 on 31 July.

If you're in your first year of self-employment, the safest approach is to put money aside every month from the start. The tax set-aside calculator estimates your Income Tax and Class 4 NI and turns it into a monthly figure, and our guide to how much tax to set aside explains the sums.

Reducing your payments on account (SA303)

If you know this year's tax will be lower than last year's, you can ask HMRC to reduce your payments on account. GOV.UK gives these reasons: your business profits or other income have gone down, the tax relief you're entitled to has gone up, or more tax is being deducted at source than the year before.

• Online: sign in to your HMRC online account, view your latest Self Assessment return and select "Reduce payments on account".
• By post: fill in form SA303 and send it to HMRC.
• Give the amount you expect to owe, so HMRC can work out the new payments. You must claim by 31 January after the end of the tax year, so by 31 January 2028 for 2026-27.

Example: Sam's payments on account for 2026-27 are £3,000 each, but Sam expects the 2026-27 bill to be about £4,000. Reducing to half of that would make each payment £2,000, which is £1,000 less on 31 January 2027 and again on 31 July 2027.

The risk: if you reduce them and your bill turns out higher than the amount you gave, HMRC charges interest on the difference, from the original due dates. HMRC can also charge a penalty if a claim to reduce is made fraudulently or negligently. So only reduce if you're confident, and use a realistic figure rather than a hopeful one.

If your income is going up, you don't have to increase your payments on account. The extra is due as a balancing payment on the next 31 January.

Paying late: interest and penalties

Interest: HMRC charges interest on any payment on account or balancing payment paid late, from the day after it was due until you pay. Late payment interest is the Bank of England base rate plus 4%. GOV.UK lists it as 7.75% from 9 January 2026 (checked 21 October 2026), and it changes when the base rate does. As a rough illustration, a £3,000 payment paid 30 days late at 7.75% would cost about £19.11 in interest.

Late payment penalties: if tax is still unpaid, GOV.UK says you'll get penalties of 5% of the tax unpaid at 30 days, 6 months and 12 months, on top of interest. HMRC's manual explains that these penalties are charged on the balancing payment rather than on payments on account themselves, but any payment on account still unpaid on the balancing payment date (31 January) is counted in that balancing payment. So a missed 31 July payment that is still unpaid on the next 31 January can end up with penalties too.

Late filing penalties are separate. If your online return for 2025-26 isn't in by 31 January 2027, there's an initial £100 penalty. After 3 months, daily penalties of £10 a day start, up to £900. After 6 months and again after 12 months, there's a further 5% of the tax due or £300, whichever is greater.

If you can't pay: contact HMRC before the deadline. You may be able to set up a payment plan to pay in monthly instalments. HMRC's manual says an agreed payment plan set up on or before a penalty date avoids that late payment penalty, as long as you keep to it. Interest is still charged.

31 January 2027 is a Sunday

The deadlines don't move. GOV.UK says that if a deadline falls on a weekend or bank holiday, your payment should reach HMRC on the last working day before, so Friday 29 January 2027, unless you pay by Faster Payments (online or telephone banking) or by debit or corporate credit card, which count on the day you pay, even at weekends. The same applies to 31 July 2027, a Saturday: aim for Friday 30 July 2027. A Direct Debit takes 3 working days if you've used one with HMRC before, or 5 if it's new.

Two other dates matter this winter. If you're employed and owe less than £3,000, you can usually have your 2025-26 bill collected through your tax code if you file online by 30 December 2026. And if you'd rather spread the next bill, a Budget Payment Plan lets you pay weekly or monthly by Direct Debit. Add every date to your phone with the free UK tax deadlines calendar.

Work out your own payments

Enter last year's Income Tax and Class 4 NI, any tax taken at source and the payments on account you've already made. The calculator shows your balancing payment, your payments on account, what's due on 31 January 2027 and 31 July 2027, and whether the £1,000 or 80% rules mean you don't need them.

Use the payments on account calculator

Estimating this year's bill? Try the tax set-aside calculator. More tools for sole traders and landlords are on the Self-Employed page.

Plan for the next bill

The UK Self Assessment Tax Set-Aside & Payments-on-Account Planner (£7, Excel and Google Sheets) turns your income into a monthly set-aside, tracks what you've saved, works out payments on account and lists your payment dates.

Get the planner (£7)

Prefer free? The tax set-aside calculator does the monthly sum in your browser.

Frequently asked questions

What are payments on account?
Payments on account are two advance payments towards your next Self Assessment tax bill, including Class 4 National Insurance if you're self-employed. Each is normally half of last year's bill, and they're due by midnight on 31 January and 31 July.

Who has to make payments on account?
Anyone who pays tax through Self Assessment, unless last year's Self Assessment bill was less than £1,000 or more than 80% of the tax they owed was already paid another way, for example through their tax code or because their bank had already taken tax off savings interest. Your Self Assessment statement or online account shows whether you need to make them and how much they are.

How much is each payment on account?
Each payment is half of last year's Income Tax and Class 4 National Insurance, after taking off tax already deducted at source. Capital Gains Tax, student loan repayments and Class 2 National Insurance aren't included. If the total has an odd penny, HMRC puts it on the second payment.

Why do I have to pay so much in my first January?
In your first year you pay the whole bill for the tax year that ended the previous April, plus the first payment on account for the current year. GOV.UK's example is a £3,000 bill, which means paying £4,500 by 31 January (£3,000 plus a £1,500 first payment on account) and another £1,500 by 31 July.

Can I reduce my payments on account?
Yes, if you expect this year's tax to be lower than last year's, for example because your profits have fallen, your tax reliefs have gone up or more tax is being taken at source. Ask HMRC online through your Self Assessment account or send form SA303, giving the amount you expect. You must claim by 31 January after the end of the tax year. If you reduce them and your bill turns out higher, HMRC charges interest on the difference.

What if I pay a payment on account late?
HMRC charges interest from the day after the due date until you pay. Late payment interest is the Bank of England base rate plus 4%, which GOV.UK lists as 7.75% from 9 January 2026. The 5% late payment penalties are charged on the balancing payment rather than on payments on account, but any payment on account still unpaid on the balancing payment date is counted in it.

31 January 2027 is a Sunday. Do I get until Monday?
No. GOV.UK says that if a deadline falls on a weekend or bank holiday, your payment should reach HMRC on the last working day before, which is Friday 29 January 2027, unless you pay by Faster Payments or by debit or credit card. Card payments made online count on the day you make them, even at weekends. 31 July 2027 is a Saturday, so the same applies.

Do I have to pay more on account if my income is going up?
No. Payments on account are based on last year's bill, and you don't have to increase them. Any extra tax is due as a balancing payment on the next 31 January, so it's worth setting it aside as you earn.

Sources

All rules and figures on this page were checked on GOV.UK on 21 October 2026:

Understand your Self Assessment tax bill: payments on account (GOV.UK)
Claim to reduce payments on account, SA303 (GOV.UK)
Pay your Self Assessment tax bill (GOV.UK)
Self Assessment tax returns: penalties (GOV.UK)
Self Assessment tax returns: deadlines (GOV.UK)
HMRC interest rates for late and early payments (GOV.UK)
Self-employed National Insurance rates (GOV.UK)
If you cannot pay your tax bill on time (GOV.UK)
HMRC manuals: SAM1010, SAM61250, SAM61390, SALF303, SALF305

Checked 21 October 2026. The interest rate changes when the Bank of England base rate changes, so check the GOV.UK page before you rely on it. General guidance only, not tax or financial advice. Your HMRC statement or online account shows your exact amounts.