Two tests, both must be met
You only make payments on account if both of these are true for last year’s return:
- Your Self Assessment bill (tax not already taken at source) was £1,000 or more, and
- Less than 80% of your total income tax and Class 4 NIC was collected at source — through PAYE, CIS deductions, or tax taken off pensions and interest.
If either test fails, there are no payments on account: you just pay your bill on 31 January.
Example: an employee with a side business
The calculator is set for someone whose total 2025/26 income tax and Class 4 NIC was £12,000, of which £10,000 was taken through PAYE from their salary.
- Self Assessment bill: £12,000 − £10,000 = £2,000 (over £1,000, so test 1 is met).
- Share collected at source: £10,000 ÷ £12,000 = 83% — that is 80% or more, so test 2 is not met.
- Result: no payments on account. You pay just £2,000 on 31 January 2027, and nothing in July.
If only £9,000 had been taken at source (75%), payments on account would apply: £3,000 balancing payment plus £1,500 on account in January (£4,500), then £1,500 in July.
Different amounts taken at source
Total tax £12,000 for 2025/26, nothing paid on account before:
| Tax taken at source (of £12,000 total) | Share | Payments on account? | Pay by 31 January 2027 | Pay by 31 July 2027 |
|---|---|---|---|---|
| £8,000 | 67% | Yes | £6,000 | £2,000 |
| £9,000 | 75% | Yes | £4,500 | £1,500 |
| £9,600 | 80% | No | £2,400 | £0 |
| £10,000 | 83% | No | £2,000 | £0 |
| £11,500 | 96% | No | £500 | £0 |
At exactly 80% (£9,600 of £12,000) the test is met — “80% or more” — so no payments on account are due. In the last row the Self Assessment bill is only £500, so the £1,000 test fails as well.
Another option: pay through your tax code
If you are employed and owe less than £3,000, HMRC can collect the bill through your PAYE tax code over the following tax year instead — as long as you file online by 30 December 2026 (for the 2025/26 return). Spreading it over 12 payslips can feel much gentler on the budget.
“Tax collected at source” means income tax actually deducted before you receive the money, such as PAYE, CIS deductions and tax taken off a pension. The 80% test uses income tax and Class 4 NIC only; capital gains tax and student loan repayments are left out.
FAQ
Do I need payments on account if most of my tax is paid through PAYE?
Not if 80% or more of your income tax and Class 4 NIC was collected at source. Then you only pay your balancing payment on 31 January.
My total tax was £12,000 and £10,000 came through PAYE. What do I pay?
83% was taken at source, so there are no payments on account. You pay just £2,000 on 31 January 2027.
What if only £9,000 was taken through PAYE?
That is 75%, so payments on account apply: £4,500 on 31 January 2027 (£3,000 balance + £1,500 on account) and £1,500 on 31 July 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”.