How and when to pay your Self-Assessment tax bill

When to pay your Self-Assessment tax bill

The Self-Assessment tax year runs from 6 April to 5 April the following year. For the 2025/26 tax year (which ended on 5 April 2026), the main payment deadline is 31 January 2027.

This 31 January deadline is crucial as it covers several obligations:

• Balancing payment: Any remaining tax you owe for the 2025/26 tax year.
• First Payment on Account: The first advance payment towards your 2026/27 tax bill.

You may also have a second Payment on Account due on 31 July. For the 2025/26 tax year, the second Payment on Account was due on 31 July 2026. For the current 2026/27 tax year, your second Payment on Account will be due on 31 July 2027.

Understanding Payments on Account

Payments on Account (POAs) are advance payments towards your next year's tax bill. HMRC uses this system to collect Income Tax and Class 4 National Insurance in two instalments throughout the year, rather than one large payment at the end.

You typically need to make Payments on Account if your last Self-Assessment tax bill was over £1,000 and less than 80% of your tax was collected through Pay As You Earn (PAYE). Each payment is usually half of your previous year's tax bill.

If your income for the current tax year is likely to be lower than the previous year, you can ask HMRC to reduce your Payments on Account. This can help prevent overpaying tax.

How to pay your Self-Assessment tax bill

HMRC offers several ways to pay your Self-Assessment tax bill. The method you choose can affect how quickly your payment reaches them. Always ensure you use your 11-digit Unique Taxpayer Reference (UTR) followed by the letter 'K' as your payment reference.

Here are the most common payment methods:

• Online or telephone banking (Faster Payments): This is often the quickest way to pay, with funds usually reaching HMRC on the same or next day. You'll need HMRC's bank details, which are available on gov.uk.
• HMRC app: You can pay directly through the HMRC app using your bank's app (Open Banking). This is instant and secure, as it pre-fills your details, reducing the risk of errors.
• Debit card online: You can pay using a debit card through HMRC's website. Payments are usually processed on the same day.
• Direct Debit: If you've set one up with HMRC previously, payments can take 3 working days. If you're setting up a new Direct Debit, allow 5 working days for it to clear. This is useful for regular payments, especially for Payments on Account.
• Bacs: Payments made via Bacs typically take 3 working days to reach HMRC.
• CHAPS: This is a same-day bank transfer service, though your bank may charge a fee.
• At your bank or building society: You can pay by cash or cheque if you have a paying-in slip from HMRC.
• By cheque through the post: Make your cheque payable to 'HM Revenue & Customs only' and write your UTR followed by 'K' on the back. Allow at least 3 working days for the payment to reach HMRC, plus postal time.

HMRC does not accept personal credit cards for Self-Assessment tax bills directly. Corporate credit cards are accepted but may incur a fee.

What happens if you pay late

Missing a payment deadline can lead to penalties and interest charges from HMRC.

• Interest: HMRC charges interest on any unpaid tax from the day after the payment deadline.
• Late payment penalties:
• A penalty of 5% of the unpaid tax is charged if the tax is still unpaid 30 days after the deadline.
• A further 5% penalty is added if the tax remains unpaid after 6 months.
• Another 5% penalty is applied if the tax is still unpaid after 12 months.

These penalties can quickly add up, so it's always best to pay on time or contact HMRC if you anticipate difficulties. If you cannot pay your bill in full, you may be able to set up a 'Time to Pay' arrangement with HMRC to spread your payments over a longer period. Interest will still apply, but you can avoid the immediate 5% late payment penalty.

Common mistakes

• Missing deadlines: The 31 January and 31 July deadlines are critical. Mark them in your calendar.
• Incorrect payment reference: Failing to include your UTR followed by 'K' can mean your payment isn't allocated to your account, leading to HMRC chasing you for unpaid tax.
• Using personal credit cards: HMRC does not accept personal credit cards directly, so attempting to pay this way will fail.
• Forgetting Payments on Account: Many new sole traders or landlords are surprised by Payments on Account, as they effectively mean paying tax for two periods in the first year.
• Not contacting HMRC if struggling: If you know you'll struggle to pay, contacting HMRC early to discuss a 'Time to Pay' arrangement can prevent larger penalties.