Payments on account rules

Payments on account are advance payments towards next year's tax bill. The rules are unchanged under MTD.

If your last Self Assessment liability was over £1,000, HMRC splits it into two instalments by default. Each instalment is 50% of last year's tax, due by midnight on 31 January and 31 July.

Changing your payments on account

If your income changes, you can adjust payments on account — but only through HMRC's online Self Assessment service(SA302/SA303), not via MTD software. After you file your final declaration for the prior year, HMRC calculates payments on account for the current year automatically. If those instalments look wrong, you must claim an adjustment in HMRC's online account.

• The first time you claim each year, you can only reduce payments on account.
• Later in the year you may increase or decrease them, up to the original amount HMRC calculated.
• All adjustments must be made before the final declaration deadline (effectively by 31 January after year-end).

Once changed in HMRC's system, updated figures replace the originals and can be viewed through HMRC's balance API or your online account. Accounting agents still use HMRC's traditional online forms for these adjustments — MTD software does not yet support changing payments on account directly.