If you’re due to make Payments on Account as part of your tax bill, the next instalment is due to HMRC by 31 July 2023.

If your tax bill is more than £1000, you’ll be required to make ‘balancing payments on account’ towards your next years’ tax bill. These are advance payments which are then deducted against next years’ tax.

There are 2 payments due each year, one when you submit your tax return (due by Midnight, 31 January) and a future payment later in the year (due by Midnight, 31 July).

Tip: Our handy explainer video below explains Payments on Account in just over 60 seconds!

The idea behind these is that you’re paying your tax in advance for the next year, partly to keep you on track and avoid a large bill when you submit your next return.

Next year, when you submit your tax return and have tax to pay on earnings, any balancing payments which you’ve made are taken off as you’ve pre-paid these.

Reducing your Payments on Account

If you know your tax bill next year is going to be lower than this year (and therefore payments on account would be more than the tax bill), you can ask HMRC to reduce your payments on account.

This can be done from within your Personal Tax Account, or by completing form SA303.

Important: If you reduce your payments on account and your tax bill next year is not lower, HMRC will charge penalties and interest.