How to Reduce Your Payments on Account (SA303) Without Getting Caught Out (2026/27)

Cut your Self Assessment payments on account online or on form SA303 - the reasons HMRC accepts, the 31 January deadline and the interest if you cut too far.

2026/27 tax year

Self-employment & Sole Trader
Self-employed (SA)
UK-wide

Summary

You can ask HMRC to reduce your payments on account if you expect this year's bill to be lower than last year's: online through your HMRC account, or on paper form SA303.
GOV.UK lists three reasons: your business profits or other income go down, the tax relief you are entitled to goes up, or tax deducted at source is more than the previous year. Not being able to afford the payment is not a valid reason.
For 2026/27 the claim must be made before 31 January 2028. Each payment on account becomes half of the amount you state you expect to owe, and a claim that you will owe nothing removes both payments.
If you reduce too far, HMRC charges late payment interest on the shortfall from each original due date. A penalty is possible only where the claim was made fraudulently or negligently.

This guide is general information, not advice.

This guide is for anyone in Self Assessment whose 2026/27 bill will be smaller than last year’s: profits have fallen, you have started paying more into a pension, or more of your income is now taxed at source. Your payments on account are based on last year’s figure, so without a claim you pay in advance for tax you will not owe and wait for the refund.

By the end you will know which route to use, what HMRC needs from you, the deadline, and exactly what it costs if your estimate turns out too low. What payments on account are, and the tests for whether you have to make them, are covered in how to pay your Self Assessment tax bill and are not repeated here.

Before you start

Your Unique Taxpayer Reference (UTR) and your Government Gateway or GOV.UK One Login details for the online route.
Your latest statement or tax calculation. For the paper route, GOV.UK says you need the name and address of your HMRC office, which is on your statement (GOV.UK).
A realistic estimate of this year’s bill. HMRC uses the amount you expect to owe to work out the new payments (GOV.UK). HMRC’s manual says the expected liability means income tax and Class 4 National Insurance for the year on all your sources, including any taxed at the higher rate (SAM1001). Work it out from your figures so far, not from what you hope.
Your reason, in a sentence. You have to give one (next section).

Step-by-step

Check that your reason is one HMRC accepts. GOV.UK lists three: your business profits or other income goes down; the tax relief you are entitled to goes up; or tax deducted at source is more than in the previous tax year (GOV.UK). The claim must state a reason, and HMRC’s manual gives inability to pay as an example of an unsatisfactory one: those claims are rejected and returned (SAM1040). If the problem is cash rather than a smaller bill, go to Time to Pay instead.
Estimate the year’s liability. Add up expected income tax and Class 4 National Insurance for 2026/27, then take off tax already deducted at source (PAYE, for example). The law works from this figure: each payment on account becomes 50% of the amount you state (TMA 1970 s.59A(4)).
Claim online (the quicker route). Sign in to your HMRC online account, view your latest Self Assessment return and select “Reduce payments on account”, entering the amount you expect to owe (GOV.UK). HMRC’s manual says claims made on the digital SA303 are normally processed automatically, with some sent for manual checking, for example where the name, address or National Insurance number does not match HMRC’s records (SAM1001).
Or claim on paper with form SA303. Fill in form SA303 on screen, print it, sign it and post it to HMRC at the office shown on your statement (GOV.UK). A paper claim must be signed by you or your agent and show the tax year (SAM1040).
To reduce to nil, say so. If you believe you will owe no Self Assessment tax at all for the year, or that tax deducted at source will cover it all, the claim removes both payments on account (TMA 1970 s.59A(3)). You still give your grounds.
Check the result, and any refund. Look at your online account to see the new amounts. If you have already paid more than the reduced figure, section 59A(5) provides for the adjustment to be made, including by repaying amounts paid on account. If HMRC rejects a claim as invalid it writes to explain why (letter SA811, per SAM1001).

Deadlines and what happens next

Latest date to claim: GOV.UK says you must claim by 31 January after the end of the tax year (GOV.UK). For 2026/27 that is 31 January 2028, the same day the balancing payment is due. The statute’s wording is “before the 31st January next following the year of assessment” (s.59A(3) and (4)).
Useful dates in practice: the 2026/27 payments on account fall due on 31 January 2027 and 31 July 2027. A claim made before a payment is due lets you pay the lower figure; a claim made after it gets you money back.
Processing time: HMRC does not publish one for this claim. Online claims are normally automated (SAM1001); check your account rather than assume.
Your due dates do not move. HMRC’s manual says the payment dates stay the same after a claim is processed (SAM1030).
When you file your return, HMRC compares your claim with the real figure. If you cut too far, interest runs from the original due dates (see below).

Common mistakes

Reducing because you cannot pay. That is not a valid reason (SAM1040). Ask for Time to Pay.
Forgetting Class 4. Your estimate has to include Class 4 National Insurance, not just income tax (SAM1001).
Treating a reduction as free. GOV.UK is plain: if your bill is higher than expected, “you’ll be charged interest on the difference” (GOV.UK). Late payment interest is Bank Rate plus 4 percentage points; HMRC’s table shows 7.75% from 9 January 2026 (HMRC interest rates).
Guessing low with no basis. The penalty power in section 59A(6) applies where an incorrect statement is made fraudulently or negligently, capped at the shortfall. HMRC’s Enquiry Manual says officers will not generally review a case for a penalty just because payments on account were less than they might have been, but it names blatant claims with no facts behind them, and repeated unjustified claims, as cases where a penalty is appropriate (EM4660).

Worked example

Assume your Self Assessment balance for 2025/26 was £8,000, so each 2026/27 payment on account is £4,000 (half of it, per s.59A(2)). Your profits have fallen and you expect to owe £5,000 for 2026/27. You claim, and each payment becomes £2,500.

	Original	After claim
Due 31 January 2027	£4,000	£2,500
Due 31 July 2027	£4,000	£2,500
Total paid in advance	£8,000	£5,000

If your estimate is right, you have kept £3,000 in your business until you file, with no interest to pay.

If the real 2026/27 bill turns out to be £6,000, HMRC’s Compliance Handbook sets the amount you should have paid on each date as the lesser of (a) the reduced payment plus half of the balancing payment and (b) the original payment on account (CH142240):

Balancing payment, assuming both reduced payments were made: £6,000 − £5,000 = £1,000.
(a) £2,500 + (£1,000 × 50%) = £3,000.
(b) £4,000.
The lesser is £3,000, so you were £500 short on each date.

Interest runs on £500 from 31 January 2027 and on another £500 from 31 July 2027 until the tax is paid. The £1,000 balancing payment is due by 31 January 2028. Had you estimated £6,000 in the first place, there would have been no interest at all: a realistic estimate matters more than a low one.

How to pay your Self Assessment tax bill - bank details, payment references and what payments on account are.
Self Assessment deadlines and payments on account 2026/27 - the full timeline and scenarios.
How to set up Time to Pay with HMRC - if the bill is right but you cannot pay it on time.

Frequently asked questions

Can I reduce my payments on account to zero?

Yes, if you believe you will not owe any Self Assessment tax for the year, or that all of it will be covered by tax deducted at source. Section 59A(3) of the Taxes Management Act 1970 says that on such a claim neither payment on account is required. You still have to give your grounds, and interest is charged if the return later shows tax was due.

What is the deadline to reduce payments on account?

GOV.UK says you must claim by 31 January after the end of the tax year. For the 2026/27 payments on account that means the claim has to reach HMRC before 31 January 2028, although it only saves you cash if you make it before the payment you want to cut is due.

What happens if I reduce my payments on account too much?

HMRC charges late payment interest on the difference. Under HMRC's Compliance Handbook, the amount you should have paid on each date is the lower of your reduced payment plus half the balancing payment, or the original payment on account, and interest runs on any shortfall from 31 January and 31 July.

Will I get a penalty for reducing payments on account?

Only if the claim was made fraudulently or negligently. Section 59A(6) caps the penalty at the difference between what you should have paid and what you did pay, and HMRC's Enquiry Manual says officers will not generally look at penalties just because payments on account turned out lower than they could have been.

Is not being able to afford the payment a valid reason to reduce it?

No. HMRC's Self Assessment Manual lists inability to pay as an unsatisfactory reason and says such claims are rejected. If you expect the same bill but cannot pay it on time, the right route is a Time to Pay arrangement with HMRC.