Self-Assessment Countdown: Your Plan for the 31 January Deadline

By John Thomas, Senior Accountant

The 31 January deadline feels a long way off in October, and that is exactly why it catches so many people out. For the 2025-26 tax year, your self-assessment return must be filed and the balancing payment made by 31 January 2027. Miss it and the penalties start automatically: £100 the day after the deadline, more after three months, more after six. Add payments on account into the mix, and January becomes the most expensive month of the year for the unprepared. Here is how to plan it properly, starting now.

The three things due on 31 January

It helps to separate what is actually due, because people conflate them:

  1. The tax return itself. Your online self-assessment return for 2025-26 must be submitted by 31 January 2027. Paper returns had an earlier deadline of 31 October, which has now passed for this year.
  2. The balancing payment. Whatever tax you still owe for 2025-26 after PAYE, CIS deductions and payments on account must be paid by 31 January.
  3. The first payment on account for 2026-27. If your tax bill is large enough, HMRC also collects half of next year's estimated bill on the same day.

That third item is the one that shocks people. It is not a penalty and it is not extra tax; it is an advance payment towards next year's bill. But it effectively means paying 150% of one year's tax in a single January, and if you have not budgeted for it, the cash flow hit is painful.

Payments on account explained simply

Payments on account apply when your self-assessment bill is £1,000 or more and less than 80% of your tax is collected at source through PAYE. Each payment is half of the previous year's total bill, due on 31 January and 31 July.

Example: your 2025-26 bill comes to £8,000. On 31 January 2027 you pay the £8,000 balancing payment plus a £4,000 first payment on account towards 2026-27. On 31 July 2027 you pay the second £4,000. When your 2026-27 return is finalised, the £8,000 already paid is credited against the actual bill.

If your income is falling, you can apply to reduce payments on account, but be careful: reduce them too far below the true liability and HMRC charges interest on the shortfall.

A month-by-month prep plan

October and November: gather. Pull together everything now while there is no pressure: P60s and P45s, bank interest statements, dividend vouchers, rental income and expense records, CIS deduction statements, records of pension contributions and Gift Aid. If you are missing anything, request it now.

December: draft. Get the return substantially complete before Christmas. This is when you spot the missing figures and the queries for your accountant, with weeks to resolve them instead of days.

Early January: review and file. Review the draft with fresh eyes, check the payments on account calculation, file the return, and note the exact payment due. Do not file on 31 January itself if you can avoid it; HMRC's systems are at their busiest and slowest.

Before 31 January: pay. Make the payment with enough time for it to clear. Bank transfer timings around the deadline have caught out plenty of people who filed on time but paid late.

Common filing mistakes

Forgetting income sources. Bank interest, dividends from investments you barely think about, rental income, and crypto disposals are the usual omissions. HMRC receives data from banks and platforms, so undeclared income is increasingly picked up automatically.

Wrong CIS deductions. Subcontractors should reconcile the deductions on their statements against what contractors actually deducted. Discrepancies are common and should be resolved before filing, not discovered during an enquiry.

Missing relief claims. Pension contributions, Gift Aid, and allowable expenses all reduce the bill, but only if claimed. Keep the evidence with the return.

Student loan and HICBC. Postgraduate and undergraduate loan repayments through self-assessment, and the High Income Child Benefit Charge, are frequently missed by people filing for the first time.

Penalties if you miss

File one day late and it is £100, automatically. Three months late and daily penalties of £10 a day begin, up to £900. Six months late brings a further penalty of 5% of the tax due or £300, whichever is greater, and the same again at twelve months. Late payment adds 5% penalties at 30 days, six months and twelve months, plus interest from 1 February. These stack quickly on a large bill.

Start now, thank yourself in January

The entire January panic is optional. A return prepared in December is a calm administrative task; the same return prepared on 30 January is a crisis. Gather your records this month, draft in December, and January becomes a month like any other.

If self-assessment always ends in a last-minute scramble, hand the process to specialists. Finex Outsourcing prepares self-assessment returns for UK sole traders, landlords and directors every year, and their corporation tax and self-assessment services cover the full cycle from record gathering to filing and payment planning, so 31 January never comes as a surprise.

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