Start with what HMRC will ask for
The calculator is set for someone whose 2025/26 bill was £6,000, who already paid £3,000 twice on account for 2025/26. So nothing extra is due for 2025/26, and HMRC will ask for two payments on account for 2026/27 of £3,000 each — on 31 January 2027 and 31 July 2027.
Example: your 2026/27 bill will be about £4,000
Say your profits have dropped and you expect your 2026/27 income tax and Class 4 NIC to be around £4,000. Each payment on account only needs to be half of that: £2,000. By reducing them, you keep £1,000 in January and another £1,000 in July, instead of overpaying £2,000 and waiting for it back in 2028.
| Your expected 2026/27 bill | Reduce each payment on account to | Saving on 31 January 2027 and on 31 July 2027 |
|---|---|---|
| £6,000 or more | Keep £3,000 | £0 |
| £5,000 | £2,500 | £500 each |
| £4,000 | £2,000 | £1,000 each |
| £2,000 | £1,000 | £2,000 each |
| Little or nothing (for example, you stopped trading) | £0 | £3,000 each |
How to do it
- Online: sign in to your HMRC online account (Self Assessment), choose to reduce your payments on account, enter the new amount and a reason.
- By post: fill in form SA303 and send it to HMRC.
- You can apply any time before 31 January 2028 — even after you have paid. If you already paid too much, HMRC will repay or credit the difference.
What if you reduce them too much?
That is fine as long as you made an honest, reasonable estimate. If your real 2026/27 bill turns out higher, you pay the shortfall in the balancing payment on 31 January 2028, plus interest (currently 7.75%) on the amount you underpaid, from each original due date. There is no late payment penalty on payments on account. A penalty is only possible if the reduction was careless or dishonest.
For example, if you reduce both payments to £1,000 but your bill ends up at £4,000, each payment was £1,000 short. Interest would be roughly £77.50 on the January shortfall (a full year) and about £39 on the July one — so it is worth estimating sensibly rather than aiming for zero.
A friendly checklist before you reduce
- Base your estimate on real figures: invoices so far, booked work, rent received.
- Remember tax on other income (interest, dividends, rent) and Class 4 NIC.
- If unsure, reduce a little less than you think — a small refund later is better than interest.
FAQ
Can I reduce my 31 January 2027 payment on account?
Yes. If you expect a lower 2026/27 bill, you can reduce both payments on account online or with form SA303. With a £4,000 expected bill, each £3,000 payment can become £2,000.
What happens if I reduce my payments on account too much?
You pay the difference with your balancing payment on 31 January 2028, plus interest from the original due dates. There is no 5% late payment penalty on payments on account.
Until when can I ask to reduce my 2026/27 payments on account?
Any time before 31 January 2028. If you have already paid, HMRC refunds or credits the overpayment.
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”.