Payments on Account (2023/2024)

Payments on Account

Payments on account (POA) are advance payments towards your personal tax and, where relevant, your Class 4 National Insurance bill. You may need to make them if you are self-employed or if you are a landlord and you complete an annual self-assessment.

You may also need to make them if you operate your business through a personal or family company and extract the bulk of your profits in the form of dividends.

Payments on Account for 2023/24

You will need to make payments on account of your 2023/2024 tax liability if your self-assessment tax bill was at least £1,000, unless at least 80% of the tax that you pay is collected at source, for example, under PAYE.

Two payments on account are made for each tax year each due on 31st January 2024 & then 31st July 2024

Calculating your Payments

Each payment on account is 50% of your income tax and Class 4 National Insurance liability for the previous tax year. You do not need to account for Class 2 National Insurance when working out your payments on account.

If, for example, your income tax and Class 4 National Insurance liability was £3,000; you will make two payments on account of your liability of £1,500 each.

Making the Payments

Payments on account are payable on 31st January in the tax year and 31 July after the end of the tax year, with any balance being due by the following 31 January after the end of the tax year.

For example, for the 2023 / 2024 year:

• 1st Payment on Account is made on 31st January 2024
• 2nd Payment on Account is made on 31st July 2024
• Balance payment is made 31st January 2025

This means that if you are liable to make payments on account you must make the first payment by 31 January (along with any remaining tax and Class 4 National Insurance, and your Class 2 National Insurance)

Second Payment on Account

The second payment on account must be made by 31 July. If there is any remaining balance to pay, this is due, together with your Class 2 National Insurance, by 31 January. If your final liability is less than you have paid on account, the excess can be set against the latest years liability or refunded.

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