The Balancing Payment is the second half of your Payment on Account, due on July 31st of the current tax year.
- half by January 31st (the usual Self Assessment tax return deadline)
- and the other half by July 31st (the “Balancing Payment”).
What happens is that the first time you pay through Payment on Account, you’ll see a tax bill that’s 150% of what you thought your tax bill should be: 100% is the tax bill for the tax year that just ended, and the other 50% is half of the advance payment for the current tax year.
By July, you have to pay the remaining 50%.
Moving forward, you’ll pay half of your “expected” tax bill by January, and half by July. Of course, if your actual income turns out to be smaller or larger, your tax bill will be adjusted (you might even get a refund). That’s the “Balancing” part.
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