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Business · Self Assessment

Payment on Account Calculator

HMRC charges Self Assessment in three goes: the balancing payment for last year, plus two equal advance ‘payments on account’ for this year. The January bill is famously double-sized.

£

Payments on Account aren’t required if your last bill was under £1,000 or 80%+ of your tax was deducted at source.

Each payment on account

£4000.00

Schedule

  • Balancing payment 31 Jan
    Last year's bill
    £8,000
  • + POA #1 31 Jan
    £4,000
  • + POA #2 31 Jul
    £4,000
  • Cash out by 31 Jan
    £12,000

How we calculated your result

POA = last year’s tax bill ÷ 2, due 31 January and 31 July. The 31 January cash demand = balancing payment + first POA — often 1.5–2× what self-employed people expect.

Official UK rules in simple English

  • Exempt if last bill < £1,000.
  • Exempt if 80%+ of your tax came from PAYE or deductions at source.
  • Reduce POAs if you expect lower income this year (form SA303 or online).
  • Interest charged at base rate + 2.5pp on underpaid POAs.

Common pitfalls to watch out for

  • ⚠ First-year shock

    Year 1 self-employed: 31 Jan you pay last year’s tax + first POA for current year. Save 60% of profits aside, not 30%.

  • ⚠ Reducing too aggressively

    If you underestimate and reduce POAs, HMRC charges interest on the shortfall once final return is filed.

  • ⚠ Class 2 NI excluded

    POAs cover Income Tax + Class 4 NI only. Class 2 is one annual sum.

Frequently asked questions

When should I reduce POAs?
If you have hard evidence of lower profits — maternity leave, redundancy, business closure. Otherwise leave alone.
Can I pay early?
Yes — HMRC credits the account. Saves interest if you’ll be late on another deadline.

Educational. Verify exact dates and amounts in your HMRC online account.

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