Why Is HMRC Asking for £3,000 When My Tax Bill Is £2,000?
Author: Ali Sirti | Reading time: 2–3 minutes | Information checked: 15 October 2026
You set aside £2,000 for your Self Assessment tax bill, but your HMRC account shows £3,000 due. Has something been calculated incorrectly? Not necessarily. The extra £1,000 may be an advance towards the following tax year, rather than the same income being taxed twice. These advances are called payments on account.
What are Self Assessment payments on account?
They are advance payments towards your next Self Assessment liability. They cover Income Tax and Class 4 National Insurance where applicable. Capital Gains Tax and student loan repayments are excluded from this calculation.
There are usually two instalments, each based on half the relevant previous year’s liability. HMRC’s payments on account guidance explains how that amount is calculated.
How does a £2,000 tax bill become a £3,000 payment?
A simple example: Assume your tax liability for 2025/26 is £2,000, the full amount is relevant to the payments on account calculation, and you have not already made advance payments towards that year.
If payments on account are required and no reduction applies, the schedule is:
| Payment deadline | What the payment covers | Amount |
|---|---|---|
| 31 January 2027 | Tax for 2025/26 | £2,000 |
| 31 January 2027 | First payment on account towards 2026/27 | £1,000 |
| 31 July 2027 | Second payment on account towards 2026/27 | £1,000 |
That means £3,000 in January and £1,000 in July. The advances are credited against your 2026/27 tax when it is calculated. Any shortfall is settled afterwards; an overpayment may be refunded or credited. This example applies HMRC’s payments on account rules using the assumptions above.
Does everyone have to make payments on account?
No. They are generally not required if the relevant amount is below £1,000, or more than 80% of the previous year’s assessed liability was collected outside Self Assessment, such as through PAYE. HMRC’s calculation guidance explains these exceptions.
Can I reduce the payments if my income falls?
If you expect your following year’s tax liability to be lower, you can ask to reduce the payments. The calculation should be based on a realistic estimate of your income and tax position.
“I cannot afford it right now” is not, by itself, a reason to reduce the amount. Reducing the payments too far can lead to interest on the shortfall. Discuss your expected income with your accountant before making a reduction claim.
How does Leon Advisers help you keep track of payments?
For every Self Assessment client, we prepare a detailed tax payment schedule showing the relevant year’s tax, any payments on account for the following year, and each payment deadline separately.
We share this schedule before each tax payment period and send reminders about upcoming payments. You can see exactly what is due in January, whether there is another payment in July, and which tax year each amount relates to.
That is why we recommend not leaving your return until the last minute. Completing the calculation early means you know how much to set aside and can plan your payments accordingly.
Plan your payment dates now
The normal online filing and balancing payment deadline for 2025/26 is 31 January 2027, as set out in HMRC’s Self Assessment deadlines.
Contact Leon Advisers to prepare your Self Assessment return and review your payment schedule together.
This article provides general information. The example uses the stated assumptions; your actual payments depend on your individual tax calculation.
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