Self-assessment payments on account

Knowledge base from Boox

By Lynne Gowers on 19th January 2018

Self-assessment payments on account

As the self-assessment deadline looms, it is not only necessary to consider what might be owing for 2017/18, but also whether any payments on account towards the 2017/18 liability need to be made.

When are payments on account required?

Self-assessment taxpayers must make payments on account, unless:
• the self-assessment bill for the previous year was less than £1,000; or
• more than 80% of the tax liability was collected at source, for example, through PAYE.

How much is each payment on account?

Each payment on account is equal to 50% of the previous year’s tax and Class 4 NIC liability. Although Class 2 contributions are now collected via the self-assessment system, they are not taken into account in working out payments on account and are payable in full no later than 31 January after the end of the tax year to which they relate.

When are they due?

Payments on account are due by midnight on 31 January in the tax year and by midnight on 31 July after the end of the tax year. Any remaining tax for the year must be paid by 31 January after the end of the tax year, along with any Class 2 National Insurance contributions due.
So, for 2017/18, payments on account equal to 50% of the 2016/17 income tax and Class 4 liability are due by 31 January 2018 and 31 July 2018, with any balance and the 2017/18 Class 2 National Insurance liability being paid by 31 January 2019.


Bill is a self-employed gardener. His profits in 2016/17 were £20,000, giving rise to a tax liability of £1,800 and a Class 4 National Insurance liability of £1,074.60 – a total of £2,874.60.
As his liability for 2016/17 is more than £1,000, he must make payments on account for 2017/18.
Each payment on account is £1,437.30 (50% of £2,874.60). The payments on account are due by 31 January 2018 and 31 July 2018.

What happens if income falls?

If circumstances change and a taxpayer knows that his income in the current year will be less than in the previous year, he or she can ask HMRC to reduce the payments on account to reflect the lower liability. This can be done via the taxpayer’s online account (by selecting `reduce payments on account’) or by sending form SA303 to the tax office.
Beware though, if the payments on account are reduced too much, interest will be charged on the shortfall.

Was this article helpful?


Although we attempt to ensure that the Information contained in this publication is accurate and up-to-date at the date of publication it may not be comprehensive, we accept no liability for the results of any action taken on the basis of the information they contain and any implied warranties, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement and accuracy are excluded to the extent that they may be excluded as a matter of law.

Download our
FREE guide

Our guide to choosing the right accounting software walks you through the market leaders to help you choose the right platform for your business

Please enter a First Name

Please enter a Last Name

Please enter a valid Email Address

Please enter a valid Mobile/Phone Number

Data protection: We take data very seriously and will not share your details with anyone else. If you wish to receive marketing communications from Boox please tick this box.

You can change your preferences at any stage by clicking on the 'Manage my preferences' link at the bottom of our emails. By continuing, you agree to our Privacy Policy.

How would you like to receive communications?


Select Yes or No


Select Yes or No


Select Yes or No


Select Yes or No
Please Verify Captcha

View our latest blogs

Take a look at our recent blogs below.

We’re here to help

Discuss your business and accountancy
needs in detail with our friendly team with
absolutely no obligation.

Call our friendly team on 0808 168 0422 or

Request a call back

(Open 8.30am to 5.30pm Monday to Friday)

Emily Ewin New Client Manager
Emily Ewin New Client Manager