Your first Self Assessment bill: payments on account and the 31 January 2027 cash call

If your first private clients arrived in the 2025/26 tax year, the Self Assessment bill that lands on 31 January 2027 may be larger than the tax figure on your return. That is because HMRC can ask for the tax you owe for 2025/26 and, on the same day, the first of two advance payments towards 2026/27. Budgeting for the first and overlooking the second is an easy mistake to make.

This is general information, not tax advice. Whether payments on account apply to you depends on your own income and what has already been taken through other routes, and that is a question for an accountant. What follows describes how GOV.UK explains the system, so you can ask better questions and set money aside in good time.

The two things due on one date

For the 2025/26 tax year (6 April 2025 to 5 April 2026), GOV.UK gives 31 January 2027 as both the online filing deadline and the deadline to pay the tax owed. Paper returns were due earlier, on 31 October 2026.

Payments on account are separate. GOV.UK describes them as payments towards your next tax bill, including Class 4 National Insurance if you are self-employed, split into two instalments due on 31 January and 31 July. Each is half of the previous year's bill.

The consequence for a first return is straightforward arithmetic. On 31 January 2027 the demand can include:

• the balance of tax for 2025/26, and
• the first payment on account for 2026/27, which is half of that same 2025/26 figure.

Then on 31 July 2027 comes the second payment on account, another half.

A worked example, with invented numbers

These figures are made up to show the mechanism. They are not a forecast and not typical of anything.

Suppose a return produces a 2025/26 bill of £3,000, and nothing was collected elsewhere.

| Date | What is due | Amount | | --- | --- | --- | | 31 January 2027 | 2025/26 tax | £3,000 | | 31 January 2027 | First payment on account for 2026/27 | £1,500 | | 31 July 2027 | Second payment on account for 2026/27 | £1,500 |

So January asks for £4,500 against a bill of £3,000. If the 2026/27 bill then turns out higher than the £3,000 those two payments assumed, the difference is a balancing payment the following January. If it turns out lower, the overpayment is dealt with afterwards.

GOV.UK's own page uses the same shape of example: a £3,000 bill meaning £1,500 payments on account, and a balancing payment where earnings come in higher than estimated.

When payments on account do not apply

GOV.UK says you do not have to make them if either of these is true:

• the tax you owed for the previous year was less than £1,000, or
• you paid more than 80% of that tax outside Self Assessment, for example through your tax code.

The second is relevant to therapists who hold an employed post alongside private work, because PAYE may already cover most of the tax. Whether you meet either condition is a calculation on your actual return. A sensible question for an accountant is simply: "Will I be asked for payments on account this January, and how much cash should I plan for?"

If your income is likely to drop

Payments on account are based on last year, not this year. A therapist whose first year included a burst of clients, or who expects to reduce hours, may find the advance payments are higher than the following year's tax will be.

GOV.UK says you can ask HMRC to reduce them, either through your online account (select the latest return, then "Reduce payments on account") or by post using form SA303, and that you will need to state the amount you expect to owe. It also says that if you reduce them and the actual bill is higher, you are charged interest on the difference. Reducing them is a judgement about your own expected income, so talk it through with your accountant first.

What happens if the date is missed

The figures here are as published by GOV.UK in October 2026.

Late filing: an initial £100 penalty, then daily penalties of £10 a day up to a maximum of £900 after three months, then 5% of the tax due or £300 (whichever is greater) at six months and again at twelve months.

Late payment: 5% of the tax unpaid at 30 days, at six months and at twelve months.

Interest: charged on top of penalties on the amount owed.

You cannot meet any of these by filing a day late and hoping. The practical protection is to get the return in with margin.

Dates worth putting in the diary

• 30 December 2026: GOV.UK's deadline for submitting an online return if you want to pay through your tax code. Whether you can use that route is something to check with HMRC or your accountant.
• 31 January 2027: file online, pay the balance, and pay the first payment on account if one applies.
• 31 July 2027: second payment on account, if applicable.

The 5 October registration deadline has already passed, so if you have not yet registered, see Registering with HMRC and speak to an accountant promptly. GOV.UK says that if you register after that date HMRC will give you a deadline three months from its letter or email, but you must still pay by 31 January 2027.

Setting money aside as you earn

Nothing about this is difficult, but it is cash-flow, and cash-flow in a small practice is lumpy. Approaches that therapists commonly consider include a separate savings account for tax, moving a fixed share of each payment across when it arrives, or asking an accountant what percentage is reasonable for your income. The right share depends on your circumstances, so that number is theirs to give.

What helps with any of them is a clean record of what you invoiced and when it was paid. If you are likely to be brought into Making Tax Digital in April 2027, the return you file in January is also the one HMRC uses to decide.

What practice software can and cannot do

MyOwnSession does not calculate your tax, does not file returns, and is not tax software. It records sessions and payments as they happen and lets you export them as a CSV, which is the raw material an accountant works from. For an overview, see what it does.

This article describes rules published on GOV.UK as at October 2026 and is provided for general information. It is not tax, accounting or financial advice and does not take account of your circumstances. Take advice from your accountant and check the current position on GOV.UK before acting. Deadlines, thresholds and penalties can change.

MyOwnSession is practice management software for UK therapists. See how it works, or compare it with the alternatives.