If you pay income tax via Payment on Account, but your income has been lower this year, you can ask HMRC to reduce the amount you pay on July 31st.
Speak to HMRC before the July 31st deadline, but be careful not to reduce the amount too much or without good reason, else you may face interest charges.
If you pay your income tax via Payment on Account each year, you've got a deadline coming up on July 31st, where you pay 50% of the tax due.
Payment on account is a way of smoothing your tax payments — paying twice over the year, rather than paying it in one lump sum at the end of the year (on January 31st). However, rather than being based upon the amount of income you've made in the year, it's an estimate based upon the previous year.
So if you paid £5,000 in tax for 24/25, you'll be paying around £2,500 in January 2026 and July 2026.
However, if the previous year you had a fantastic amount of income, but the most recent year has been tough - you might end up paying more in tax via Payment on Account than is required.
Whilst you'll eventually get this back from HMRC, it can mean that you might not have enough put aside for this month's bill.
In which case, you can reduce the amount you'll pay to HMRC on July 31st, to make it closer to what you realistically owe.
If you think you might be paying more than you need to, you can apply to reduce your payments at any time before the deadline. You can do this via paper or online - obviously online is much simpler and faster.
Online: Sign into your HMRC online account, select the option to view the latest self-assessment return, and then select "Reduce payments on account".
Post: You'll need to send a SA303 form to your tax office.
If you reduce the payments on account, but then your tax bill is higher than you expected — you will be charged interest on the difference, so it's always better to be conservative in your estimates.
Late payment interest is charged at 7.75% (as of January 2026). In some cases, HMRC can also charge penalties, if your payment on account is reduced too much or without a good reason.
If you pay too much by Payment on Account, the amount you'll be due to pay next time will be reduced, and calculated again for you by HMRC for the next deadline.
HMRC will also pay you interest (although not a great deal) on any overpayments you've made. Repayment interest is at 2.75% (as of January 2026).
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