Skip to content
    GigKiln

    Payments on account for gig workers

    Factual guidanceFresh — reviewed 19 April 2026Sources: 7Next review: 18 July 2026

    Summary

    Payments on account are advance payments towards your next Self Assessment bill, and in 2025-26 they catch loads of gig workers off guard because HMRC asks for them on top of the tax you already owe.

    If your last Self Assessment bill for income tax and Class 4 National Insurance was over £1,000, and less than 80% of your tax was already collected at source, HMRC usually asks for two payments on account: one on 31 January and one on 31 July, each worth 50% of the previous year's bill.

    That is why the second year of Uber, Deliveroo or Amazon Flex work can feel like "triple tax": you pay the old bill, the first half of the next bill on the same day, then another half six months later.

    Key facts (UK 2025-26)

    • Payments on account apply if your previous year's income tax plus Class 4 National Insurance bill is over £1,000 and less than 80% of your tax was collected at source.
    • Each payment on account is 50% of that previous year's income tax and Class 4 National Insurance bill.
    • The two payment dates are 31 January and 31 July.
    • The 31 January payment often includes two things at once: your balancing payment for the year just ended plus your first payment on account for the next year.
    • You can ask HMRC to reduce payments on account using form SA303 if you honestly expect lower profits, more tax deducted at source, or more reliefs in the current year.
    • Reducing them is risky if your estimate is too low, because HMRC can charge interest on the shortfall later.
    • HMRC lets you make advance saving payments towards Self Assessment using a Budget Payment Plan with weekly or monthly Direct Debit.
    • For 2025-26, the personal allowance is £12,570 and Class 4 National Insurance is 6% on profits between £12,570 and £50,270, then 2% above that, which matters for working out your likely bill.

    Legislation, case law, regulation

    • Taxes Management Act 1970: the main Act behind Self Assessment, balancing payments and payments on account.
    • Income Tax Act 2007: governs income tax liabilities that feed into Self Assessment calculations.
    • Social Security Contributions and Benefits Act 1992 and related National Insurance regulations: underpin Class 4 National Insurance, which is included in payments on account.
    • HMRC guidance: Pay your Self Assessment tax bill: confirms due dates, payment methods and the existence of payments on account.
    • HMRC guidance: Claim to reduce payments on account: confirms use of SA303 and the reasons HMRC accepts for a reduction claim.

    How it actually works

    HMRC looks at your last tax bill

    • It takes your previous year's income tax plus Class 4 National Insurance bill.
    • It ignores student loan, Class 2 National Insurance, capital gains tax and some other bits when calculating the payments on account amount.

    HMRC checks the trigger

    • If that bill is over £1,000, and less than 80% of your tax was already taken at source, you are in.
    • Gig workers usually trip this because Uber, Deliveroo and Amazon Flex do not deduct tax before paying you.

    HMRC splits the amount in half

    • First half due 31 January.
    • Second half due 31 July.

    Why the second year feels vicious

    • In your first year of gig work, you are building up a tax bill quietly in the background.
    • On 31 January after that year, HMRC wants the full tax for year 1 and the first half of year 2 on the same day.
    • Then on 31 July, it wants the second half of year 2.
    • If your income rises in year 2, you then face a further balancing payment on 31 January after year 2 because the payments on account were based on the smaller year 1 bill.

    How to reduce them

    • You can use SA303 if you genuinely expect your current year profits to be lower, or more tax to be deducted at source, or bigger reliefs.
    • This is sensible if, for example, you cut back gig work for childcare, switch to PAYE, stop driving, or your income crashes.
    • It is risky if you just reduce them because you cannot afford them: if your real bill turns out higher, HMRC can charge interest on the underpaid amount.

    Best saving method for gig workers

    • The simplest setup is a separate tax pot: a separate savings account or pot that is not your spending money.
    • Move a fixed percentage of every payout straight into it the day Uber, Deliveroo or Amazon Flex pays you.
    • For many basic-rate gig workers in 2025-26, a rough rule is 20% to 25% of gross gig income if profits are modest, or 25% to 30% if you are a higher earner or do not track expenses well.
    • If you use HMRC's Budget Payment Plan, you can drip money in weekly or monthly by Direct Debit, but many workers prefer their own pot because they can see the money and keep control.

    Worked example

    Here is a worked example for someone starting Uber work.

    Year 1, 2025-26 tax year

    • Uber gross income: £22,000 in 2025-26.
    • Assume allowable expenses: £4,000.
    • Profit: £18,000.

    Year 1 tax calculation:

    • Personal allowance for 2025-26: £12,570.
    • Taxable profit: £5,430.
    • Income tax at 20%: £1,086.
    • Class 4 National Insurance at 6% on £5,430: £325.80.
    • Total bill used for payments on account test: £1,411.80.

    Because that is over £1,000, payments on account kick in.

    What gets paid, and when

    31 January 2027 On this date, the driver must pay:

    • Balancing payment for 2025-26: £1,411.80.
    • First payment on account for 2026-27: £705.90 (50% of £1,411.80).
    • Total due on 31 January 2027: £2,117.70.

    This is the point where people panic: they expected roughly £1,412, but HMRC wants over £2,117 on the same day.

    31 July 2027

    • Second payment on account for 2026-27: £705.90.
    • Total due on 31 July 2027: £705.90.

    Year 2, 2026-27 tax year

    Now assume the same person works more and earns:

    • Uber gross income: £28,000 in 2026-27.
    • Assume allowable expenses: £5,000.
    • Profit: £23,000.

    Year 2 tax calculation (using the 2025-26 style rates as the closest published frame in this worked example):

    • Taxable profit above personal allowance: £10,430.
    • Income tax at 20%: £2,086.
    • Class 4 National Insurance at 6% on £10,430: £625.80.
    • Total 2026-27 bill: £2,711.80.

    But the person has already paid:

    • First payment on account: £705.90.
    • Second payment on account: £705.90.
    • Total already paid towards 2026-27: £1,411.80.

    31 January 2028 On this date, HMRC will ask for:

    • Balancing payment for 2026-27: £1,300.00 (roughly £2,711.80 minus £1,411.80).
    • First payment on account for 2027-28: £1,355.90 (50% of the new 2026-27 bill).
    • Total due on 31 January 2028: about £2,655.90.

    31 July 2028

    • Second payment on account for 2027-28: £1,355.90.

    Why this feels like "triple tax"

    From the worker's point of view:

    • 31 January 2027: old tax bill + first half of next year.
    • 31 July 2027: second half of next year.
    • 31 January 2028: top-up for year 2 plus first half of year 3.

    It is not literally three years of tax at once, but cash-flow wise it can feel like that, especially if your profits rise from year 1 to year 2.

    What Reddit, TikTok and forums get wrong

    1. "Payments on account are HMRC charging you twice for the same tax." Wrong. They are advance payments towards the next tax year, based on the last one.

    2. "Everybody in Self Assessment has to pay them." Wrong. They usually only apply if your previous year's income tax plus Class 4 National Insurance was over £1,000 and less than 80% was taxed at source.

    3. "Just file SA303 and knock them down to zero, HMRC can't do anything." Dangerous rubbish. You can reduce them only if you genuinely expect a lower bill, and if you cut them too far HMRC can charge interest later.

    4. "If you miss 31 January, wait until next year and sort it all together." Wrong. Interest starts building, and penalties can follow if you do not deal with the bill.

    5. "Payments on account include student loan and every charge on the statement." Wrong. They are mainly based on income tax and Class 4 National Insurance, not every line on your HMRC statement.

    Action steps for the reader

    1. Log in to your HMRC account and look at the line that says payments on account so you know exactly how much is due on 31 January and 31 July.
    2. If your current year profits have genuinely dropped, use SA303 or the online HMRC reduction option before the deadline.
    3. If your profits have not dropped, do not slash the payments just because the bill hurts; that can store up interest and a worse shock later.
    4. Set up a separate tax pot today and move 20% to 25% of each payout into it; if your profits are climbing, use 25% to 30%.
    5. If you cannot pay on time, check HMRC's Budget Payment Plan or ask about a Time to Pay arrangement quickly instead of going silent.
    6. Put the four dates in your calendar now: 31 January 2027, 31 July 2027, 31 January 2028, 31 July 2028.
    • Payments on account shock calculator: shows the first January bill, July payment, and next January top-up using real gig income.
    • Tax pot percentage calculator: turns weekly Uber, Deliveroo or Amazon Flex payouts into a saving amount per payout.
    • SA303 risk checker: asks whether income has genuinely fallen and flags when reducing payments is sensible or risky.
    • HMRC deadline calendar generator: creates the next Self Assessment and payments-on-account dates for the worker's exact situation.
    • "First Self Assessment tax return for gig workers"
    • "How much tax should Uber and Deliveroo workers put aside each week?"
    • "SA303 in plain English: reducing payments on account safely"
    • "What to do if you cannot pay your Self Assessment bill"
    • "Budget Payment Plan and Time to Pay for self-employed workers"

    Sources

    Primary

    Secondary

    Before you leave

    Sources

    • Taxes Management Act 1970
    • Income Tax Act 2007
    • Social Security Contributions and Benefits Act 1992
    • GOV.UK Pay your Self Assessment tax bill
    • GOV.UK Claim to reduce payments on account (SA303)
    • LITRG Self assessment tax payments guidance
    • TaxAid deadlines and penalties guidance
    Fresh — reviewed 19 April 2026