23/03/2026
❇️ Payments On Account ❇️
Payment on accounts are a system HMRC use for directors, self-employed individuals and other taxpayers to pay their personal taxes & national insurance in advance….. only for those whose tax liabilities are £1,000 or higher!!
❇️ Here's how it works:
Based on your tax liability from the previous tax year, HMRC calculates your payment on account for the current tax year. The payment on account is usually made in two installments - one due by 31st January and the other by 31st July.
Each payment on account is equal to half of your previous year's tax bill. So, if your total tax liability for the previous tax year was £2,000, you will need to make two payments of £1,000 each as your payment on account.
🚨 Remember, this isn't an additional tax - it's HMRC 'helping you' pay in advance - lovely of them!!!
🚨 If you believe your tax liability for the current year will be lower than the previous year, you can request to reduce your payment on account.
🚨 When you submit your Self Assessment tax return for the current tax year, HMRC will reconcile your actual tax liability with the payment on accounts you made. If you paid more than necessary, you'll receive a refund. On the other hand, if you didn't pay enough, you'll need to settle the remaining balance by 31st January the following year.
✅ Please feel free to get in touch for any assistance!
