When is the balancing payment due?

The balancing payment is due by 31 January following the end of the tax year. For example, for the 2025/26 tax year, it's due 31 January 2027.

What happens if I overpay?

If your payments on account exceed your actual tax bill, HMRC will refund the difference or credit it against future payments.

Can I reduce payments on account?

Yes, if you expect lower income next year, you can apply to reduce payments on account using form SA303 or through your online account.

What if I can't afford to pay?

Contact HMRC to set up a Time to Pay arrangement before the deadline to avoid penalties.

Does the balancing payment include National Insurance?

Yes, it includes Class 4 NI for self-employed individuals, as well as any student loan repayments due.

Self Assessment2026/27

What is Balancing Payment? UK Definition 2026/27

Written by Waqas Sagar ACA, FCCA, FMAAT

•

Verified by ICAEW, ACCA & AAT

•Updated April 2026

Quick Answer

The final Self Assessment payment due on 31 January to settle your tax bill after payments on account.

Definition of Balancing Payment

A balancing payment is the amount you owe HMRC after your payments on account have been deducted from your total Self Assessment tax bill. It's due by 31 January following the end of the tax year.

If your actual tax bill is higher than your payments on account, you pay the difference. If it's lower, you receive a refund or credit against future payments. The balancing payment also includes any Class 4 National Insurance and student loan repayments due.

Balancing Payment — Key Facts for 2026/27

Due date	31 January
Includes	Income Tax, Class 4 NI, Student Loans
Interest rate	7.75% on late payments (2026/27)
Payment methods	Direct Debit, bank transfer, card

How Balancing Payment Works — Example

Calculating balancing payment

1Total tax due for 2025/26: £8,000
2First payment on account (31 Jan 2026): £3,000
3Second payment on account (31 Jul 2026): £3,000
4Balancing payment due 31 Jan 2027: £8,000 - £6,000 = £2,000
5Plus first payment on account for 2026/27: £4,000
6Total due 31 January 2027: £6,000

How Balancing Payment Affects Your Tax

Missing the balancing payment deadline results in automatic penalties: £100 immediate penalty, daily penalties after 3 months, and interest charges. Setting up a Direct Debit or budget account helps manage cash flow.

Official HMRC Guidance on Balancing Payment

For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.

HMRC: Payments on account

Frequently Asked Questions about Balancing Payment

Related Tax Terms

Payment on Account

Advance payments towards your Self Assessment tax bill, due 31 January and 31 July.

Self Assessment

The system for reporting income and calculating tax owed to HMRC.

Late Payment Interest

Interest charged by HMRC on overdue tax payments at Bank of England rate plus 2.5%.

Accuracy Note

This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.