How do payments on account work for self-assessment?

Payments on account are advance payments toward your next tax bill, each equal to 50% of your previous year's tax. The first is due 31 January during the tax year, and the second 31 July after it ends. A balancing payment covers any remaining tax due on 31 January the following year.

When is the self-assessment tax deadline?

For the 2026/27 tax year: the tax return must be filed online by 31 January 2028. The balancing payment (and first payment on account for the following year) is also due on 31 January 2028. Paper returns have an earlier deadline of 31 October 2027.

How much should I save for tax each month as a freelancer?

A common rule of thumb is 25-30% of profit, but the exact amount depends on your income level and tax band. Use this calculator to get a precise monthly figure based on your expected profit.

Quarterly Tax Estimator

Never be caught short by a tax bill. See exactly how much you owe, when it's due, and how much to set aside each month — including payments on account.

Tax year 2026/27· Updated with current HMRC rates

Your details

Enter your expected profit for the current tax year.

Expected annual profit

Revenue minus allowable expenses

Other income

Employment, rental, etc.

Tax region

Student loan

Is this your first year of self-employment?

Last year's total tax bill

Used to calculate payments on account

Total tax this year

£8,622

Save monthly

£719

£166/week

vs last year

+£1,622

+23.2%

Tax breakdown

Income tax£6,486

Class 4 NICs(6% / 2%)£1,946

Class 2 NICs(£3.65/week)£190

Total tax bill£8,622

Payment schedule

You'll make payments on account (advance payments based on last year's bill) plus a balancing payment.

1st Payment on Account

31 January 2027

£3,500

50% of last year's tax bill (£7,000). Also due: any balancing payment from last year.

2nd Payment on Account

31 July 2027

£3,500

Second instalment — same amount as January.

Balancing Payment

31 January 2028

£1,622

Difference between actual tax (£8,622) and POAs already paid (£7,000).

1st POA for next year

31 January 2028

£4,311

Also due on the same date — 50% of this year's tax as advance payment for next year.

Set aside money every month

Put £719/month (£166/week) into a separate savings account. This covers your entire tax bill including payments on account. A high-interest easy-access savings account means you earn interest on HMRC's money before it's due.

Tip: Set up an automatic standing order on the day you invoice so you never forget.

Save your results

Email yourself a copy of these calculations to refer back to later.

How this works

Based on HMRC 2026/27 tax rates.
Payments on account are each 50% of the previous year's tax bill. Not required if last year's bill was under £1,000 or if >80% was collected at source.
The balancing payment is the difference between your actual tax and the POAs already paid.
January 31st is a double hit: you pay the balancing payment for the old year AND the first POA for the new year.
You can apply to reduce POAs if you expect your income to be significantly lower than last year.

Understanding self-assessment payments

The January 31st double hit

January 31st is the most expensive day of the year for many freelancers. On this date you pay both the balancing payment for the previous tax year AND the first payment on account for the current year. If your income has been growing, this can be a significant amount.

Can you reduce payments on account?

If you expect your income to be significantly lower than last year, you can apply to HMRC to reduce your payments on account. Be careful though — if you reduce them too much and your actual bill is higher, you'll pay interest on the shortfall.

Setting money aside

The best approach is to transfer a fixed percentage of every invoice into a separate tax savings account the day you receive payment. A high-interest easy-access account means you earn interest on the money before it's due. Automatic standing orders on invoice day make this effortless.

This tool provides estimates based on current HMRC rates. Your actual tax bill may differ based on reliefs, allowances, and other factors. Always check with a qualified accountant.