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What are Payments on Account?

Payments on Account are advance payments towards your tax bill.

You’d need to make 2 payments on account each year unless your last self-assessment tax bill was less than £1000 or you paid more than 80% of the previous year’s tax you owed, e.g through your tax code or because your bank had already deducted interest on your savings.

Each payment is half your previous year’s tax bill. Payments are usually 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 the following year. 

Payments on account do not include anything you owe for capital gains or student loans (if you’re self-employed). You’d pay those in your ‘balancing payment’.

If you know that your tax bill is going to be less than previous years you can ask HMRC to reduce your payments on account either online or by post. You might pay the wrong amount if your tax bill is higher or lower than you expected, in this case any overpayment would be refunded by HMRC, any underpayment would be charged with interest.

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