Balancing payment
The balancing payment is the difference between the tax you actually owe for a year and what you already paid towards it in payments on account. It is due on 31 January with the return.
Correct for the 2026/27 tax year. Last checked 12/09/2026.
If you earned more than the year before, the balancing payment is positive and you owe. If you earned less, it can be a refund, and your payments on account for the year ahead drop with it.
What it means for your money
It is paid on the same day as the first payment on account for the following year, which is why a January bill is usually one and a half years of tax rather than one.
You can ask HMRC to reduce your payments on account if you know your income has fallen. Reduce them too far and interest runs on the shortfall, so it is a judgement rather than a free option.
Where to read more
Related
Payment on account
A payment on account is an advance instalment towards next year's tax bill. HMRC asks for them once your bill passes £1,000, in two halves, each equal to 50% of the year just filed.
HMRC & taxUpdated 27/08/2026
Payments on account, explained with a first bill
A payment on account is an advance instalment towards next year's tax. HMRC asks for them once a bill passes £1,000, in two halves each worth 50% of the year just filed. It is why a first bill can be one and a half years of tax at once.
HMRC & taxUpdated 27/08/2026
When do I have to pay my tax bill?
By 31 January following the end of the tax year, with a second instalment on 31 July if you are making payments on account.
HMRC & taxUpdated 19/08/2026
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