Payments on Account Calculator
Estimate the January balancing payment and possible January/July advance payments using HMRC’s relevant-amount rules.
Payments on account are normally two advance payments toward next year’s Income Tax and Class 4 National Insurance. HMRC bases them on the prior year’s relevant amount: relevant Income Tax and Class 4 NI after Income Tax deducted at source. They do not cover Capital Gains Tax or student-loan repayments.
How the calculation works
Each payment on account is usually half of the relevant amount. A payment on account is not normally required if the relevant amount is below £1,000 or is less than one-fifth of the assessed Income Tax and Class 4 NI — broadly, where more than 80% was paid outside Self Assessment. The normal due dates are 31 January and 31 July. Your HMRC statement remains the authoritative figure, particularly after return amendments or a claim to reduce payments.
If you reasonably expect the next year’s relevant tax liability to be lower, you can ask HMRC to reduce payments on account. Take care: interest can apply where a reduction proves too low. Check the statement in your Self Assessment account or ask an accountant if you have Capital Gains Tax, student-loan repayments, CIS deductions, amendments or a ceased trade.
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Information on this page is general guidance for UK small businesses and is not financial, tax or legal advice. Tax rules, allowances and product terms change. Always check current information with HMRC, Companies House or a qualified professional before making decisions.