If you’ve joined Making Tax Digital (MTD) for Income Tax, voluntarily as part of HMRC’s testing phase or because you’ve been brought in from April 2026, you may have noticed something odd about your payments on account.
They might show as “nil,” as “transferred to digital,” or seem to have disappeared from your usual Self Assessment statement altogether.
You haven’t necessarily done anything wrong, and neither has HMRC lost your money. What’s actually happened is that Making Tax Digital, known as MTD, has changed where this information lives, and for many business owners, that’s proving to be one of the more confusing parts of the transition.
Here’s what’s going on, and what you need to check.
What are payments on account?
Payments on account are advance payments towards your next tax bill, usually required if your Self Assessment bill is over £1,000 and less than 80% of your income is taxed at source.
HMRC splits your estimated liability into two instalments, with one due by 31st January and one by 31st July, based on your previous year’s tax bill.
If you’d like a fuller breakdown of how these are calculated, or support with the wider Self Assessment process, our Self Assessment Tax Returns service covers this in more detail.
Why Making Tax Digital changes where your payments on account show up
Under MTD, your tax affairs aren’t tracked in one place anymore. Your records are now split between two separate systems:
- Your MTD income tax account, which holds payments on account for 2025/26 onwards, along with any related interest and penalties.
- Your Self Assessment (Self Assessment) account, which still holds anything owed for 2024/25 and earlier, including balancing payments, older underpayments, and certain credits.
HMRC has acknowledged that this split has caused confusion for people testing MTD. Because the two systems don’t automatically combine into a single statement, a payment on account for 2025/26 can appear on your paper Self Assessment statement as “transferred to digital” rather than as a figure.
Additionally, your Self Assessment statement might show a balance of nil even though a payment is still due elsewhere. Taxpayers who signed up for MTD partway through the year have, in some cases, seen 2025/26 payment on account information show up in both places at once, so it’s worth checking that whatever you’re about to pay hasn’t already been recorded twice.
None of this means the payment isn’t owed, or that HMRC has made an error with your account. It means you need to look in two places rather than one to get the full picture.
What is payment on account in UK tax self-assessment terms once you’re on MTD?
The underlying rules haven’t changed. You’re still making two advance payments a year towards your estimated tax bill, calculated the same way it always has been.
What’s different is purely the reporting, as your MTD software handles your quarterly updates and running tax estimate, while your payments on account obligation is administered and tracked partly through your MTD account and partly through the legacy Self Assessment system, at least during this transitional period.
Where to check your figures
To see the complete picture of what you owe and when, you’ll need to look at your MTD income tax account and your Self Assessment account, not just one or the other.
Both are accessible from your personal or business tax account on GOV.UK.
If a payment on account you’ve made doesn’t appear to have been allocated correctly, or you can’t reconcile the figures across both accounts, HMRC’s dedicated MTD helpline is available for individuals, or the standard agent line is also available.
Can I make online payments on account for my taxes?
Yes, as the payment process itself hasn’t changed under MTD. You still pay through your HMRC online account or the HMRC app, using the same bank transfer, debit card, or Direct Debit options as before.
If you discover you’ve overpaid because of the way figures have been split across your MTD and Self Assessment accounts, HMRC has introduced a new digital service specifically for reclaiming overpayments shown in your MTD account. It’s always worth checking your balance rather than assuming any credit will carry over automatically.
When are the deadlines for UK tax payments on account?
This is the part worth repeating clearly, because it’s easy to assume a new system means new dates, and it doesn’t.
The payments on account deadlines remain 31st January and 31st July, exactly as they were before MTD. For the 2025/26 tax year, that means the first payment was due by 31st January 2026, and the second by 31st July 2026.
MTD changes how and where you report your income, with quarterly updates, digital record-keeping, and a final declaration, but it hasn’t touched the dates HMRC expects payment.
For a full walkthrough of how the quarterly reporting cycle fits together, our Making Tax Digital page covers the process end to end.
Guidance on reducing your provisional tax payments if income has dropped
If your income for the current year is going to be lower than last year’s, you don’t have to pay a payment on account based on an outdated figure. You can apply to reduce it, but this needs care, since claiming a reduction that turns out to be unjustified can lead to interest charges, or in more serious cases, penalties.
If your circumstances have changed and you think your payments on account no longer reflect reality, it’s worth talking this through with an accountant before submitting a claim, particularly while MTD’s dual-account reporting is still bedding in.
How Tax Driven Accountants can help
Making Tax Digital is still relatively new, and HMRC itself has acknowledged that its own systems are creating confusion around payments on account for those using this system. You shouldn’t have to piece together your tax position across two different HMRC accounts on your own.
We can check both your MTD and Self Assessment records on your behalf, confirm exactly what’s due and when, and make sure nothing has been double-counted or missed in the handover between systems. If you’re not yet within MTD’s scope but want to understand what’s coming, or you’d like help getting your bookkeeping MTD-ready ahead of your threshold date, our team can talk you through it.
Contact us on 0800 999 1800 or send us an enquiry.
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