First payment on account for 2023-24

Hi, I am completing my self assessment and at the same time as the amount I owe for 2022/2023, it is asking me to pay 50% of the amount due for 2022/2023 as a "First payment on account for 2023-24". This would imply a massive payment in January 2024. And I may owe less tax next year, as the tax I owe is related to property income that may decrease next year. Is this "First payment on account for 2023-24" compulsory and can I choose to decrease it? Or can I decide to pay everything in January 2025? Thanks a lot

If you also did a self-assessment last year, you should already have made two payments on account for 22/23 (if you click on "view previous payments" they should be listed). For some reason this doesn't show up in the tax calculation, but after you submit the SA, the final tax bill for January should be around 50% of the total, not 150%. This gives me a shock every year until I remember! If this is your first self-assessment, I don't remember how it works in the first year, sorry. If you do need to reduce the payments on account, there's a checkbox in the online self assessment form for this — I think it's "do you wish to apply to reduce the payments on account for 2023/24?" I don't know if you can simply reduce the payments on account to zero; presumably there'd be some tax or interest implications. I assume it is best simply to make a realistic estimate of your future income. Please note, I am not an accountant.

Thanks a lot Alex. I started renting out my flat in March 2022 so last year I almost didn’t pay any tax, and I was not asked to make any payment on account for this year. This is the issue, now I end up having to pay 150% of the amount due for 2022/2023. Is there any chance I can ask for my first 2023/2024 payment on account to happen later than January 2024? Also, what would happen if my 2 payments on account end up exceeding the tax I owe for 2023/2024? Because I am being asked for 2 payments on account for 2023/2024 that each equal to 50% of what I owe for 2022/2023, should it be 33.33% and not 50%? Thanks a lot for your precious help

Hi Stephanie Duprat,
Please refer to guidance  here:
Understand your Self Assessment tax bill
Thank you. 
 

Thanks a lot, this is very helpful If I make 2 payments on account and the sum is less than the tax I owe for the following year, will I be charged interests even if I pay the difference/‘balancing payment’ by midnight on 31 January of the following year? Thanks a lot

Hi,
No. If the payments on account do not cover the full balance once you submit your Self Assessment then you would have up to the 31 January the following year to pay the remaining balance before interest would be charged. 
Thank you.

Super, thanks a lot for your precious help

Hello HMRC Admin, I have paid 2 payments this year for 2022/23 tax year and my total tax bill higher than my 2 payment. I understood how much I need to pay as per the link provided. Thank you for that. But, I would like to know if I have to do any tax adjustments to take account of these 2 advance payments made to match the total overdue tax bill for 2022/23.

Hi Prashants, 
No you do not need to make any adjustment.
The payments on account are not part of the Self Assessment tax calculation, as the calculation shows the balance for the tax year but does not take into account any payments made.
Your statement of account will show the payments on account you paid and any final balancing payment due.

Hi This is the first time I have to make advance payment for 2023/2024. I never owe any tax or anything and suddenly I am asked to make 50% of 2023/2024 which I haven't done before end of Jan 2024. Is there a reason why? Thank you

ANY HELP WELCOME?? Why do the tax do this?? I paid my 20/21 tax bill of £938 on 10/01/22 then my 21/22 tax bill of £969 on 06/01/23. Yet this year 22/23, I am expected to pay £1849.20!! £1232.40 by 31/01/24, which okay my pension has gone up but then another £616.40 for a 1st payment on account due for year 23/24.

Hi mayahidajat,
Please refer to:
Understand your Self Assessment tax bill
Thank you. 

Hi. I have a similar query. In previous years my tax bill has been under £1500 not £1000 which was paid in full. This year this has increased to closer to £3000 so I'm now expected to pay the first half of 23/24 tax year which is quite significant. This is a mixture of paying back child care benefit (as the higher earner) and property rent. Has this threshold changed this year to be lowered to £1000? The page linked is useful but i couldn't see a way to see if this threshold amount changed. I double checked my previous returns but they only explicitly asked for that years payment and the pay that said "first payment on account" was marked as 0 Thanks Mike

Hi Chris Parkes,
‘Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed).
You have to make 2 payments on account every year unless:
your last Self Assessment tax bill was less than £1,000
you paid more than 80% of the previous year’s tax you owed, for example through your tax code or because your bank had already deducted interest on your savings
Each payment is half your previous year’s tax bill. Payments are usually due by midnight on 31 January and 31 July.
If you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31 January next year.
Thank you.

Hi. I think I've figured out what changed for me. Apologies to those I'm starting the obvious about. Due to what is owed i think I've only paid less than 80% via PAYE so it's not the £1000 threshold that has affected me as such. Bit of a shock to the system (I'll be going into savings to pay it) but after this first shock hopeful following years shouldn't be as bad as the payments are balanced over the year. Cheers Mike

Hi
Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed).
You have to make 2 payments on account every year unless:
your last Self Assessment tax bill was less than £1,000
you paid more than 80% of the previous year’s tax you owed, for example through your tax code or because your bank had already deducted interest on your savings
Each payment is half your previous year’s tax bill. Payments are usually due by midnight on 31 January and 31 July.
If you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31 January next year.

Dear HMRC, I am currently in the process of completing my self-assessment for the tax year 2022/23. I have already made two payments on account towards my tax liability for the year ending 5th April 2023. The first payment, totalling £2,087.47, was made on 31st January 2023, and the second payment, amounting to £2,087.48, was made on 27th June 2023. However, in the recent calculation I am about to submit for 2022-23, it shows an outstanding amount of £8,694.99, due by 31st January 2024. This amount is detailed as £5,796.66 for the tax year 2022-23 and £2,898.33 as the first payment on account for the tax year 2023-24. My concern is that the two instalments I have already paid on 31st January 2023 and 27th June 2023, totalling £4,174.95, do not seem to be reflected in the current calculation for the tax year 2022-23. Could you please clarify whether these payments will be taken into consideration at the time of the actual tax payment, and if so, do I just need to make the difference as indicated? Thank you for your prompt attention to this matter.

Hi MikePre,
Both of these criteria need to be met for payments on account to be introduced.
An underpayment of more than £1000 and less than 80% of the underpayment can be collected automatically.
You are paying the current years tax in advance of the end of the tax year.
(employees do it with the tax on their monthly salaries).
Thank you. 

Hi , I have a large tax bill to pay for 22/23 which i can pay in full by due date , i then have another large 1st payment on account also due end of jan , can i defer this on account payment and pay it with my july account payment ?

Dear HMRC I have just submitted my self assessment tax return for 22/23. Last year I made 2 payments on account towards this tax bill. I have earnt more in this year so therefore have an outstanding amount owed to be paid by 31st Jan 24. I also have another payment on account that needs to be pre paid. Is it possible to pay what is owed for 22/23 (balancing payment) and then moving forward set up a budgeting plan instead of paying the payment on account in 2 lump sums?? So effectively im paying my tax month (still in advance) just not in 2 chunks??