🇬🇧 2026/27
WORKED EXAMPLE · ESTABLISHED SELF-EMPLOYED

Payments on account on a £10,000 tax bill

Your business grew last year — well done! When profits rise, January brings a top-up for last year and bigger advance payments for this year. Here is the maths, step by step.

Update 5 November 2026: the Bank of England raised Bank Rate to 4%, so HMRC’s late payment interest will rise from 7.75% to 8% from a date HMRC announces. The examples on this page use 7.75%; at 8% the interest is about 3% higher (for example £6.58 instead of £6.37 on £1,500 for 20 days). Enter 8% in the calculator for 2027 deadlines.

Your 2025/26 tax

The situation

The calculator is set for someone who has been self-employed for a few years:

What is due on 31 January 2027

  1. Balancing payment for 2025/26: £10,000 − £8,000 already paid = £2,000.
  2. First payment on account for 2026/27: 50% of £10,000 = £5,000.
  3. Total: £7,000.

Then on 31 July 2027 you pay the second payment on account, another £5,000. On 31 January 2028 you settle any difference between your real 2026/27 bill and the £10,000 paid on account.

How earlier payments change the January bill

Same £10,000 bill for 2025/26, with different amounts already paid on account:

Already paid on account for 2025/26Balancing paymentPay by 31 January 2027
£0£10,000£15,000
£6,000£4,000£9,000
£8,000£2,000£7,000
£10,000£0£5,000
£12,000£0 (overpaid £2,000)£5,000

If you paid more on account than your final bill (the last row), the overpayment is not lost: HMRC sets it against what you owe next, or repays it to you. The calculator shows you this as a note.

Budgeting tip

With a £10,000 yearly bill, setting aside about £833 a month covers it. Because payments on account fall in January and July, many people keep two pots — one for each date. If your profits keep rising, set aside a little extra for the balancing payment.

What if this year is different?

Payments on account always look backwards: they are based on 2025/26. If your 2026/27 profits are likely to be much lower, you can ask HMRC to reduce both payments. If they will be higher, the extra is simply settled on 31 January 2028 — no penalty, as long as you pay then. Either way, a quick look at your numbers each autumn helps you avoid surprises.

Got a student loan or capital gains?

Enter them in the “Capital gains tax, student loan & other” box. They are added to the balancing payment only, so they increase what you pay in January but never the payments on account.

Payments on account are due when last year’s Self Assessment bill is £1,000 or more and less than 80% of your tax was collected at source. Late payments on account attract interest at 7.75%, but not the 5% late payment penalties.

FAQ

How much do I pay on 31 January 2027 with a £10,000 bill?

If you already paid £8,000 on account for 2025/26, you pay a £2,000 balancing payment plus a £5,000 first payment on account — £7,000 in total.

What do I pay on 31 July 2027?

Your second payment on account for 2026/27: half of £10,000, which is £5,000.

What if I made no payments on account last year?

Then the whole £10,000 is the balancing payment, plus £5,000 on account: £15,000 on 31 January 2027.

Sources (checked 5 November 2026): GOV.UK “Understand your Self Assessment tax bill: payments on account” (gov.uk/understand-self-assessment-bill/payments-on-account); Taxes Management Act 1970 s59A and the Income Tax (Payments on Account) Regulations 1996 (£1,000 de minimis); GOV.UK “Self Assessment tax returns: deadlines”.

🧮 Payments on account calculator 2026/27 →🧮 The 80% rule: PAYE and payments on account →⬇️ How to reduce your payments on account →🇬🇧 All UK tax calculators 2026/27 →