How to Pay Self Assessment Tax Without Stress or Surprises

How to Pay Self Assessment Tax the Smart Way

“The hardest thing in the world to understand is income tax.” – Albert Einstein.

If that quote makes you feel better, you’re not alone. Even the great minds have struggled with tax. But paying your Self Assessment tax doesn’t have to be overwhelming, - not if you break it down, stay organised, and use the right tools. Whether you're self-employed or juggling a side gig, this guide will help you understand what you owe, when it’s due, and how to pay it, -  the easy way.

Let’s get right to it.

How Much Do You Actually Need to Pay?

Once you submit your Self Assessment return, HMRC will calculate your bill. That bill might include

• A balancing payment (what you still owe from the last tax year), and
• Payments on account (an advance toward next year’s bill if your total tax is over £1,000).

Here’s the part that surprises most newcomers: those payments on account mean you're paying extra — 50% of your estimated next year’s tax — and that’s due alongside your current year’s bill. Yes, it’s a double whammy. And it hits hard if you weren’t expecting it.

🔍 Quick tip:

If this is your first year filing a Self Assessment, you won’t have to make payments on account yet — but you will from the following year if your bill crosses that £1,000 threshold.

When Isthe Deadline to Pay Self Assessment Tax?

Mark this date: 31st January.

That’s when your balancing payment and first payment on account (if applicable) are due.

There is a second payment on account due on 31st July, but for now, the big one to worry about is January.

If you’re reading this and it’s mid-January, you still have time – but barely. The later you leave it, the fewer options you’ll have to spread your payments or avoid cash flow pressure.

Best Ways to Pay Self Assessment Tax

Different payment methods have different speeds, and that matters a lot as the deadline approaches. Here’s how to pay and how long each option takes:

💨 Same Day or Next Day

• Bank transfer (Faster Payments, CHAPS, online banking)
• Debit card or corporate credit card
• In-person at your bank (only with HMRC’s paying-in slip)
• Via the HMRC App – slickest of them all!

⏳ 3 Working Days

• BACS transfer
• Existing Direct Debit
• Posted cheque (not recommended near deadline)

🐢 Up to 5 Working Days

• New Direct Debit (longest processing time, so don’t use it if you're short on time)

The Fastest Way to Pay Self Assessment Tax

Hands down: the HMRC app.

Open it, choose “Pay your Self Assessment tax,” select your bank, confirm the payment in your banking app, and done — in under a minute. Plus, it’s secure and gets your payment through fast. Over 50,000 taxpayers used it in the last year alone, and the reviews are solid.

Honestly, if you’ve got a smartphone, there’s no reason not to use it.

Can I Pay Through PAYE Instead?

Yes, if you’re employed and have a side income, you can ask HMRC to collect your Self Assessment tax via your PAYE code. They’ll take monthly deductions from your salary — easy and invisible.

But here’s the catch: if you’d rather keep your side hustle private from your employer, don’t use PAYE. Stick with paying HMRC directly.

Need More Time? Use HMRC’s Time to Pay Plan

If paying your full bill now just isn’t realistic, you can apply for a Time to Pay arrangement — a way to spread the cost over 12 months.

Here’s howit works:

• You must owe less than £30,000
• You must apply within 60 days of the payment deadline
• You can’t have any outstanding debts with HMRC

Set it up online without needing to call anyone — a small mercy in today’s hold-music nightmare.

Understanding “Payments on Account”

This part trips up almost everyone at least once.

Payments on account are advance payments towards your next tax bill. HMRC assumes next year will be similar to this one and asks for 50% upfront in January, and another 50% in July.

So if your current bill is £2,000, you may owe:

• £2,000 (balancing payment)
• £1,000 (first payment on account)

Total: £3,000 by 31st January.

No, it’s not fun — but knowing this in advance helps you plan cash flow better and avoid nasty surprises.

Penalties: What Happens If You Pay Late

Late payment costs you — and not just a slap on the wrist.

Here’s what HMRC charges:

• Interest at the Bank of England base rate + 2.5%
• Penalty fees that grow the longer it’s unpaid

You’ll also get fined £100 just for missing the filing deadline, even if you owe nothing. After 3 months, daily penalties kick in, and it gets ugly from there.

So don’t wait. Get it filed, and get it paid.

Final Thoughts: Don’t Leave It Late – Ever

The best approach? File early, know what you owe, and give yourself time to plan. That way, whether you pay in full, through PAYE, or set up a payment plan, you stay in control.

And if you need help? That’s exactly what we’re here for.

At Cannon Accountants, we simplify Self Assessment from start to finish — from filing to payment support — so you don’t have to navigate it alone. Reach out to us before the stress kicks in.