What is a payment on account and will I have to make one?

A payment on account is an advance payment towards your next year's tax bill. If your Self Assessment tax bill is over £1,000, HMRC automatically splits your next year's estimated bill into two instalments and asks you to pay them in advance: the first on 31 January (alongside your current year's bill) and the second on 31 July. Each payment is half of your previous year's bill. This catches a lot of first-year filers by surprise — in January you could end up paying your 2024/25 bill plus the first instalment towards 2025/26 all at once. If your income is likely to be lower in the current year, you can apply to reduce your payments on account. If you're unsure how this affects you, message us on live chat.