REMEZ & PARTNERS

How to pay your Self Assessment bill

Pay HMRC by 31 January, quoting your Unique Taxpayer Reference followed by the letter K. Bank transfer arrives fastest; a new direct debit takes about five working days to set up. If last year's tax was over £1,000, the bill also includes a payment on account for the year ahead, with a second due 31 July.

Paying is the simple part. What trips people is the reference, the timing of the transfer, and the reason the bill is half again as large as the tax they thought they owed.

Ways to pay, and how long each takes

  • Faster Payments — same or next day. The default for anything close to the deadline.
  • CHAPS — same working day, within your bank's cut-off.
  • Bacs — about three working days.
  • Debit card online — usually shows within a few days.
  • Direct debit — allow around five working days for a first one. Not a plan for 30 January.
  • At your bank or building society, if you have a paying-in slip.

The deadline is about arrival, not dispatch. A payment sent on 31 January by a method that takes three days is a late payment.

The reference is UTR plus K

Eleven characters: your ten-digit Unique Taxpayer Reference, then the letter K. Without it the payment is not matched to you, and the practical consequence is a demand for money you have already sent while you try to prove where it went.

Why the January bill is bigger than the tax

Because it usually is not one payment. On 31 January you may be paying the balance for the year just filed and the first payment on account for the year in progress.

Payments on account apply unless last year's tax was under £1,000, ormore than 80% of last year's tax was collected at source — through a tax code, for example. Each is half of last year's tax bill, due31 January and 31 July.

So a first profitable year producing £3,000 of tax means £4,500 in January — the £3,000 owed plus £1,500 in advance — and another £1,500 in July. Nothing has gone wrong; the system has simply asked for eighteen months of tax in six. Knowing that in April rather than in January is most of what makes it survivable, which is the argument for filing early.

Reducing them

If you genuinely expect to earn less, payments on account can be reduced. Reduce them below what turns out to be due and HMRC charges interest on the difference — so it is a forecast, not a deferral.

Know the number before January

We file in the spring where clients let us, so the bill is a budgeted figure rather than a surprise — including the payment on account, which is the part nobody warns first-timers about.

Or send an email

Free assessment first. If there is work to do, you get a fixed quote in writing before anything starts.

If you cannot pay

Arrange it rather than avoid it. Time to Pay spreads the bill over monthly instalments and smaller Self Assessment debts can often be set up online without a phone call. Interest continues, but the escalation stops.

5% of the tax still unpaid at 30 days, again at 6 months, and again at 12 months — Interest runs from the due date regardless, and has no reasonable-excuse defence. Doing nothing is the one approach that reliably costs more than the tax itself.

Questions people ask

What is my payment reference?

Your ten-digit Unique Taxpayer Reference followed by the letter K — eleven characters. Pay without it, or with the wrong one, and the money sits unallocated while HMRC continues to show you as owing it.

Why is my bill more than the tax I owed?

Payments on account. The January bill is often last year's balance plus half of it again as an advance on the current year. First-timers see roughly 150% of what they expected, and it is the single most common shock in Self Assessment.

When do payments on account apply?

Unless last year's tax was under £1,000, or more than 80% of last year's tax was collected at source — through a tax code, for example. Each payment is half of last year's tax bill, due 31 January and 31 July.

Can I reduce my payments on account?

Yes, if you genuinely expect to earn less. But reduce them too far and HMRC charges interest on the shortfall, so it is a judgement about the year ahead rather than a way of deferring the bill.

What if I cannot pay by 31 January?

Set up a Time to Pay arrangement — smaller Self Assessment debts can often be arranged online without speaking to anyone. Do it before the deadline: interest still runs, but the penalties for late payment can be avoided where a plan is in place.

How long does payment take to reach HMRC?

Faster Payments usually the same or next day; Bacs about three working days; a new direct debit around five. The deadline is when the money arrives, not when you send it, and weekends and bank holidays count.

Figures are for the tax year shown and change every April. They are general information, not advice — we check the current position for your circumstances before anything is filed.

Reviewed 19 October 2026.

Part of our work on self-employment and self assessment — if you want someone to take it off your hands, start with our Self Assessment accountant page.