If your Self Assessment tax bill (income tax plus Class 4 NIC) is over £1,000 and less than 80% of it was collected at source, HMRC asks you to pay on account — two advance instalments towards next year's bill.
Payments on account are advance payments towards your next year's Self Assessment tax bill. HMRC requires them when your last year's tax bill (income tax plus Class 4 National Insurance) was more than £1,000 and less than 80% of that tax was collected at source — for example through PAYE or tax deducted from savings interest. Self-employed people and landlords commonly meet these conditions because their tax is rarely collected at source. Each payment on account is half your previous year's tax bill. There are two of them, so together they cover the whole of last year's bill. That amount is then balanced against the current year's actual tax when you file your return, and the balancing payment (or repayment) settles the difference.
For the 2025/26 tax year, the first payment on account is due on 31 January 2027 — the same date as your balancing payment for 2025/26 — and the second is due on 31 July 2027. For the following tax year the two dates are 31 January 2028 and 31 July 2028. These dates matter because interest is charged on late payments, including late payments on account. If your income drops, you can apply to reduce your payments on account to what you expect to owe — but if your reduction is too low, interest is charged on the difference from the original due date.
Each payment on account is 50% of your previous year's qualifying tax bill — the income tax plus Class 4 National Insurance from your last Self Assessment return. So if your 2024/25 bill was £4,000, each of your 2025/26 payments on account is £2,000: £2,000 in the January instalment and £2,000 in the July instalment. These advances are not an extra charge — they are simply paying next year's tax early. When you file your 2025/26 return, your actual tax for that year is compared with the £4,000 you have already paid in advances (plus any balancing payment), and anything you have overpaid is refunded.
KAZAALBAIDA's UK freelance simulator estimates your income tax and Class 4 NIC and tells you whether your bill is likely to trigger payments on account — the £1,000 threshold — and roughly what each instalment would be. Use it with your turnover, expenses and other income to see the shape of your next bill. The page also shows the exact due dates for the tax year you select, so you can plan your cash flow around 31 January and 31 July. The estimate is a planning aid, not a filing — your actual Self Assessment may differ.
Payments on account explained: HMRC's advance instalments for Self Assessment — when they are due, how they are calculated, and when you can reduce them.
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