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What is Balancing payment?
Last verified 23 October 2026
A balancing payment is the tax still owed for a tax year after your payments on account are taken off. If you do not make payments on account, it is simply your whole bill for the year.
Why it matters to landlords
You work it out by taking your total Self Assessment bill for the year and subtracting the payments on account you have already made. It is due by midnight on 31 January after the tax year ends, the same day as the online return. It can also include Capital Gains Tax owed for the year.
Payments on account are based on the previous year's bill, so when rents rise or costs fall the balancing payment can be large. You do not need payments on account if last year's bill was under £1,000 or if you paid more than 80% of the tax you owed outside Self Assessment, for example through PAYE. Under the new Making Tax Digital penalty rules, late payment penalties apply to balancing payments but not to payments on account.
Example
Your 2025 to 2026 bill is £5,000. You paid two payments on account of £2,000 each, based on last year's £4,000 bill. Your balancing payment is £1,000, due by 31 January 2027.
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