UK Freelancer Kit

Payments on account explained

Short answer: Payments on account are 2 advance payments towards your next tax bill, each normally half of last year's bill, due by 31 January and 31 July. You do not make them if last year's bill was under £1,000 or more than 80% of your tax was collected at source.

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General information, not tax or financial advice. Check GOV.UK or speak to a qualified adviser about your own situation.

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Payments on account are 2 advance payments towards your tax bill, each normally half of your previous year's bill. They are due by midnight on 31 January and 31 July. They do not apply if last year's bill was under £1,000, or if more than 80% of your tax was already collected at source.

How do payments on account work in practice?

Your 2025/26 bill is £4,000 and you have not paid on account before. By 31 January 2027 you pay £4,000 plus a £2,000 first payment on account for 2026/27, so £6,000. By 31 July 2027 you pay another £2,000. If your 2026/27 bill turns out to be £5,000, you pay a £1,000 balancing payment by 31 January 2028, plus the first payment on account for 2027/28.

Work out your likely bill with the self-employed tax calculator, then set aside a monthly amount.

GOV.UK sources (checked 15 October 2026):
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Frequently asked questions

What are payments on account?

Advance payments towards your next tax bill, each normally half of last year's bill, due by 31 January and 31 July.

Who does not have to make payments on account?

You do not if last year's Self Assessment bill was less than £1,000, or if you paid more than 80% of the tax you owed through your tax code or other deductions.

What is a balancing payment?

If your tax for the year is more than your 2 payments on account, you pay the difference by 31 January the following year.

Why is my first January bill so big?

In your first year with a bill over £1,000, the 31 January payment includes the full bill for last year plus the first payment on account for this year.

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