How do I reduce my payments on account?

Sign in to your HMRC online account, view your latest Self Assessment return and choose "Reduce payments on account", or post form SA303. Claims for 2026-27 must be made by 31 January 2028.

Payments on account for 2026-27 are worked out from your 2025-26 bill and fall due on 31 January 2027 and 31 July 2027. If you know this year will be leaner, you do not have to pay on last year's figures. Our guide to what payments on account are covers the basics. This page is about cutting them. The rules follow GOV.UK, HMRC's manuals and the Taxes Management Act 1970, checked on 16 October 2026.

When a reduction can make sense

GOV.UK says you can apply to reduce the payments if:

• your business profits or other income go down
• the tax relief you are entitled to goes up
• tax deducted at source is more than in the previous tax year

In a trade, that might be a quiet spell, time off after an injury, a costly new van that cuts your taxable profit, or more of your work coming through contractors who take CIS deductions. HMRC's manual uses exactly that CIS case as an example. If your business has stopped, that is also a reason HMRC's online form lists.

You can go all the way to nil if you expect no tax for the year beyond what has been deducted at source. HMRC's manual says the estimate must cover all your income for the year, including any new source, not just the trade.

Steps to reduce your payments on account

1. Estimate your profit for the current tax year, then the Income Tax and Class 4 National Insurance on it. Take off any CIS deductions you expect.
2. Sign in to your HMRC online account and view your latest Self Assessment return.
3. Select "Reduce payments on account" and enter the amount you expect to owe, with your reason.
4. If you cannot apply online, fill in form SA303 on screen, print it and post it. You need your Unique Taxpayer Reference (UTR) and the HMRC office name and address from the top of your statement.
5. Check your Self Assessment statement afterwards to see the new amounts.
6. Keep a note of how you reached your estimate, in case HMRC asks later.

Worked example

Danny is a self-employed roofer living outside Scotland, with no other income and no CIS deductions. His 2025-26 bill for Income Tax and Class 4 came to £8,000, so HMRC expects £4,000 on 31 January 2027 and £4,000 on 31 July 2027.

A slow summer means he now expects profit of £24,000 for 2026-27. On 2026-27 rates, that is Income Tax of 20% on £11,430 (£2,286.00) plus Class 4 of 6% on the same £11,430 (£685.80): £2,971.80 in all.

Reducing keeps £5,028.20 in Danny's account during 2027, instead of waiting for HMRC to repay it after he files. This is an example only. Your own figures will differ.

If you reduce too far

If your bill turns out higher, GOV.UK says HMRC charges interest on the difference. Section 86 of the Taxes Management Act sets how: each payment is treated as if it had been the lower of the reduced payment plus half of the balancing payment, or the original amount. Interest runs from 31 January and 31 July.

Take Danny again, but his profit ends up at £30,000, a bill of £4,531.80. Half of that is £2,265.90.

• He cut the payments to £1,485.90 each: the shortfall is £780 on each date. At HMRC's late payment rate of 7.75% (in force since 9 January 2026), paid off on 31 January 2028, the interest is about £91.
• He cut them to nil: the shortfall is £2,265.90 on each date, and the interest is about £264.

The rate can change, so treat these as rough figures. On top of interest, the law allows a penalty where a claim was made fraudulently or negligently. HMRC's manual says it is not sought for an honest mistake made in good faith.

What this means for you

Use a realistic figure, not a hopeful one. If you are unsure, reducing part of the way keeps the interest risk small, and any overpayment comes back to you. You can also increase the payments if the year picks up. HMRC's manual says a claim on form SA303 is rejected once HMRC has already captured the tax return for that year, so act before you file.

Next step

The free MTD check shows when Making Tax Digital starts for you, and the trades section has more guides on tax bills for tradespeople.