The short answer
A balancing payment is the remaining Self Assessment liability after deducting payments on account already made.
For the 2025/26 return it is normally due by 11:59pm on 31 January 2027. That date can also carry the first 2026/27 payment on account; the second is due on 31 July 2027. The January amount may therefore contain two different charges.
Calculation
Suppose the actual 2025/26 liability is £5,000 and two payments on account of £2,000 each were made. The balancing payment is £1,000.
If the £5,000 liability also sets the 2026/27 payments on account, another £2,500 can be due on 31 January 2027, followed by £2,500 on 31 July 2027. The January total would be £3,500, but only £1,000 is the balancing payment.
What may be included
The final Self Assessment position can include Income Tax, Class 4 National Insurance, Capital Gains Tax and student loan amounts. Payments on account do not necessarily cover every component, so a balancing payment can include capital-gains or student-loan amounts even when business profit is stable.
Tax deducted under PAYE or CIS must be entered and supported correctly to reduce the amount due.
Calculation versus statement
The return’s tax calculation works out liability. The live statement shows payments made, payments on account, balancing payment, older amounts and interest.
If filing close to the deadline, a paper statement may not arrive before payment is due. Save the calculation before submission and check the online account.
If the balance is a repayment
Where advance payments and tax deducted exceed actual liability, the account may show a credit or repayment. Check that HMRC has processed the return and allocated every payment before requesting repayment.
Reconcile charge by charge
Create a simple schedule with a row for the final liability, each payment on account actually credited, PAYE or CIS deducted where relevant, and the resulting balance. Keep the first instalment for the next year on a separate row. This avoids describing the entire January amount as the balancing payment.
Use transaction dates and HMRC’s allocation, not only bank-payment dates. A payment sent with an incorrect reference may not appear against the expected charge even though money left the bank. Likewise, an earlier credit can reduce the statement balance without changing the tax calculation. Resolve those differences before assuming the return itself is wrong.
Where the return is amended, retain both calculations and note the additional liability or repayment created by the amendment. Then compare that change with the live statement, including any interest. The return calculation and account statement are connected records, but they are not interchangeable.
Late or amended returns
An amendment can change the balancing payment. The original due date does not automatically move just because figures are corrected later. Interest and payment allocation can therefore need reconciliation.
If HMRC issued the return late, specific statutory timing can apply. Use the exact HMRC notice rather than assuming the normal date.
Common mistakes
- Subtracting payments that were never made.
- Treating the next instalment as part of the old liability.
- Ignoring CIS or PAYE tax already deducted.
- Assuming the calculation includes every statement item.
- Waiting for paper near the deadline.
- Paying with the wrong reference.
What to do next
- Save the return calculation.
- Confirm payments on account actually credited.
- Calculate actual liability less payments.
- Separate the next first instalment.
- Check the live statement.
- Pay using the official route by the deadline.