Missing a Self Assessment payment deadline can cost you more than just sleep. Between late payment penalties, daily interest charges, and the confusion around payments on account, many small business owners find themselves caught out each January and July. This guide walks you through exactly what’s due, when it’s due, and how to avoid expensive mistakes.
Self Assessment payment due dates at a glance
The UK Self Assessment system revolves around two major payment deadlines: 31 January and 31 July. Most self-employed individuals and company directors will need to make at least one payment each year, whilst those with higher tax bills face obligations on both dates.
On 31 January, you’ll typically pay any outstanding tax from the previous year (the “balancing payment”) plus the first installment towards the current year’s liability. Then, six months later on 31 July, the second instalment falls due. Understanding when is self assessment due helps you plan cash flow and avoid unnecessary penalties – crucial for any small business managing tight margins.
Key deadlines by tax year
For the 2025/26 tax year (which covers income from 6 April 2025 to 5 April 2026), here’s what you’re working towards:
- 31 October 2026: Deadline for paper Self Assessment returns
- 31 January 2027: Deadline for online returns, balancing payment for 2025/26, and first payment on account for 2026/27
- 31 July 2027: Second payment on account for 2026/27
These dates repeat annually, always anchored to the tax year end of 5 April.
What the UK “tax year” means
The UK tax year runs from 6 April one year to 5 April the next. So the 2025/26 tax year covers all income and gains you received between 6 April 2025 and 5 April 2026. This quirky timing dates back centuries, but it means your Self Assessment return filed in January 2027 reports on income you earned nearly a year earlier.
Filing vs payment deadlines
Don’t confuse when you must file your return with when you must pay your tax bill. You can submit your online return any time before midnight on 31 January, but payment must reach HMRC by the same date. Filing early gives you more time to arrange funds, check calculations, and sort out any unexpected liabilities.
What is due on 31 January?
For most taxpayers, 31 January is the big one. It’s the date your Self Assessment return must be filed and when substantial payments hit your account.
First payment on account for the current tax year
On top of the balancing payment, most people must also pay the first payment on account towards the current tax year on 31 January. This is essentially a prepayment – HMRC assumes your income will be similar to last year and asks for half your previous year’s liability upfront.
So in the example above, where your 2025/26 tax bill was £10,000, you’d pay £5,000 on 31 January 2027 as the first payment on account for 2026/27. That means on 31 January, you’re paying both the £2,000 balancing payment and the £5,000 payment on account – £7,000 in total.
National Insurance and student loans in January
Class 2 and Class 4 National Insurance contributions for the self-employed are collected through Self Assessment and included in your January payment. Class 2 is a flat weekly amount (£3.45 per week for 2025/26 if profits exceed £6,725), whilst Class 4 is percentage-based on profits above £12,570.
What is due on 31 July?
The second payment deadline often catches people off guard, particularly in their first year of Self Assessment.
Who does not have payments on account
Not everyone faces payments on account. You’re exempt if:
- Your previous year’s Self Assessment tax bill (after deducting tax paid at source) was less than £1,000, or
- More than 80% of your tax was already collected through PAYE
These exemptions typically cover people with small side incomes, landlords with modest rental profits, or employees with minor untaxed income. If your Self Assessment bill is only a few hundred pounds, you’ll just pay the balancing amount in January with no July payment.
Who must make payments on account
You’ll make payments on account if your last Self Assessment showed a tax liability exceeding £1,000 after deducting any tax already collected at source (such as PAYE or tax on savings interest), and less than 80% of your total bill was collected through PAYE.
Typical scenarios include:
- Self-employed individuals and freelancers with no PAYE income
- Company directors taking dividends alongside modest salaries
- Landlords with significant rental income
- Anyone with large amounts of untaxed investment income
The £1,000 threshold and 80% PAYE rule
Both conditions must be true for payments on account to apply. Let’s say your Self Assessment bill was £1,200 but £900 had already been deducted through PAYE on your salary. That’s only £300 outstanding, so you’d pay £300 in January with no payments on account.
Imagine your 2025/26 Self Assessment showed:
- Income Tax: £8,000
- Class 4 National Insurance: £1,500
- Class 2 National Insurance: £179
- Capital Gains Tax: £3,000
Your total bill is £12,679. But for payments on account purposes, you only count the Income Tax and Class 4 NIC: £8,000 + £1,500 = £9,500.
On 31 January 2027, you’d pay:
- Balancing payment: £12,679 (everything due for 2025/26)
- First payment on account: £4,750 (half of £9,500)
- Total: £17,429
Then on 31 July 2027:
- Second payment on account: £4,750
Rolling forward each year
Each year, your payments on account are recalculated based on the most recent return. If your income drops, your payments on account will naturally reduce the following year. If it rises, they’ll increase. This rolling mechanism means payments on account broadly track your actual income over time.
Balancing payments
A balancing payment arises when the tax you actually owe exceeds what you’ve already paid through payments on account or PAYE.
What triggers a balancing payment
Common triggers include:
- Your income increased compared to the previous year
- You claimed fewer tax reliefs than anticipated
- You had additional income not reflected in last year’s figures (such as Capital Gains Tax)
- You reduced your payments on account but underestimated your liability
If your actual tax bill for 2025/26 is £12,000 but you only paid £10,000 through payments on account, you’ll owe a £2,000 balancing payment on 31 January 2027.
Amendments to the return and their impact
Filed your return but discovered an error? You can amend it within twelve months of the filing deadline (so up to 31 January 2028 for a 2025/26 return filed in January 2027).
How and when to pay HMRC
Getting money to HMRC on time requires planning. Different payment methods have different processing times, and cutting it fine can leave you liable for late payment penalties even if you thought you’d paid “on time”. Modern business accounts like ANNA Money help small business owners manage these payments efficiently alongside invoicing and bookkeeping, making it easier to stay on top of tax deadlines and maintain accurate records.
Accepted payment methods and processing times
HMRC accepts several payment routes, each with distinct timings.
Faster Payments, CHAPS, and Bacs
Most people pay by bank transfer:
- Faster Payments: Same-day if sent before your bank’s cut-off (often 3pm or 6pm). Most banks process these instantly, but allow a buffer.
- CHAPS: Same-day guaranteed, but your bank may charge £25–£35. Use this if you’re genuinely down to the wire.
- Bacs: Takes three working days. Not suitable near deadlines unless you plan well in advance.
Always use your Unique Taxpayer Reference (UTR) followed by the letter K as your payment reference.
Your payment reference
Using the correct payment reference ensures HMRC allocates your payment to the right account. Get this wrong and your payment might sit unallocated, triggering penalty notices even though you’ve paid.
UTR with the ‘K’ suffix
Your reference is your eleven-digit Unique Taxpayer Reference followed by the letter K. So if your UTR is 1234567890, your payment reference is 1234567890K.
You’ll find your UTR on your tax return, on letters from HMRC, and in your HMRC online account. Double-check you’ve typed it correctly before authorising the payment.
One reference per person, not per bill
Use the same reference regardless of whether you’re paying a balancing payment, a payment on account, or settling penalties. HMRC will allocate incoming funds to outstanding liabilities automatically. If you accidentally use the wrong reference (or forget the K), contact HMRC’s helpline to have the payment reallocated.
Budget Payment Plan (weekly or monthly in advance)
HMRC offers a Budget Payment Plan that lets you spread payments over the year, reducing the 31 January sting.
How to set it up and who can use it
Log into your HMRC online account and set up weekly or monthly standing orders. You choose how much to pay and when. There’s no formal approval process – you simply start paying, and the funds sit on your HMRC account until the January or July deadlines.
This works well if you prefer steady cash management rather than two large lump sums.
Interaction with payments on account and Time to Pay
A Budget Payment Plan is not a payment arrangement or Time to Pay agreement. You’re paying before the deadline, so there are no interest charges or penalties. Come 31 January, HMRC deducts what’s due from the credit balance you’ve built up. If you’ve overpaid, the surplus rolls forward or can be refunded.
This differs from Time to Pay (covered below), which is a formal installment plan agreed after the deadline when you can’t pay in full.
Time to Pay arrangements (if you cannot pay)
If you genuinely cannot afford to pay your Self Assessment bill by the deadline, you may be able to arrange a payment plan with HMRC.
Eligibility, limits, and how to apply
You can apply online if:
- You owe £30,000 or less
- Your tax returns are up to date
- You don’t already have a Time to Pay arrangement or other tax debts
The online service lets you set up monthly instalments over 6–12 months. For debts above £30,000 or more complex situations, call HMRC’s Self Assessment helpline.
Interest and penalties under Time to Pay
Time to Pay does not stop interest from accruing. You’ll pay daily interest from the original deadline until the debt is cleared. However, HMRC may reduce or waive late payment penalties if you set up a plan quickly and stick to it.
Coding out small debts through PAYE
If you have a small Self Assessment debt and you’re also employed or receive a pension, HMRC might “code out” the debt through your PAYE code.
Late payment penalties are entirely separate and apply regardless of whether you filed on time.
File even if you can’t pay
Always file your return on time, even if you can’t pay. This avoids the filing penalties and gives you a better position from which to negotiate a Time to Pay arrangement. Filing shows good faith and limits the overall cost.
Special cases and common scenarios
Not everyone’s tax situation fits the standard pattern. Here are common variations that change when and how much you pay.
High earners with complex income
If you’re earning from multiple sources – salary, dividends, rental income, savings interest – your balancing payments can be substantial. High earners often face restrictions on personal allowances and pension reliefs, which inflate the tax bill. Consider quarterly profit reviews and set aside 30–40% of profits in a separate account to cover tax bills.
Partnerships and partners
The partnership submits a separate partnership return, but individual partners are responsible for their own tax. Each partner includes their share of the profit on their personal Self Assessment and pays their own Income Tax and National Insurance – there’s no such thing as “partnership tax”.
Total paid over twelve months: £11,847
When Emma files her 2026/27 return in January 2028, HMRC will compare her actual liability with the £5,834 she’s already paid. If her income stayed similar, there’ll be little or no balancing payment.
Important: First-year Self Assessment filers often face a “payment shock” in their second January when both the balancing payment and first payment on account fall due together. Budget carefully and consider setting aside funds monthly.
Increasing income year-on-year
Scenario: Priya’s 2024/25 income was £50,000, with a tax bill of £9,000. She paid £4,500 on 31 January 2026 and £4,500 on 31 July 2026. But in 2025/26, her business boomed and she earned £70,000, with an actual liability of £14,000.
31 January 2027:
- She’s already paid £9,000 through payments on account
- She owes £14,000 in total
- Balancing payment: £5,000
- First payment on account for 2026/27: £7,000 (half of £14,000)
- Total due: £12,000
31 July 2027:
- Second payment on account: £7,000
1–2 weeks before 31 July
- Log into your HMRC account and confirm the payment on account amount
- Check your bank balance and ensure sufficient funds
- Arrange payment at least three working days early
- Double-check your payment reference (UTR + K)
- If using Direct Debit, verify it’s still active
FAQ
Does HMRC extend the 31 January deadline in severe weather or system outages?
Very rarely, and only for widespread system failures on HMRC’s end. Severe weather affecting an individual is not considered a reasonable excuse. If you genuinely can’t file or pay, contact HMRC immediately and document everything.
Can I split my January bill across multiple bank accounts or cards?
Yes. Make multiple payments using the same reference (your UTR + K) and HMRC will aggregate them. Just ensure the total reaches them by the deadline.
Will HMRC text or email me payment reminders?
HMRC sends reminders if you’ve opted in, but genuine messages never include clickable payment links. Always log into your HMRC account directly through GOV.UK rather than clicking email links.
Understanding Self Assessment payment deadlines isn’t just about avoiding penalties – it’s about maintaining control over your cash flow and planning your business finances effectively. Mark 31 January and 31 July in your calendar now, set aside funds regularly, and file early to give yourself maximum flexibility. With the right preparation, these deadlines become manageable milestones rather than financial shocks.
