You normally pay sole trader tax to HMRC through Self Assessment. First register if required, prepare and submit your return, check the amount due, then make a separate payment using HMRC’s official payment service. Submitting a return does not pay the bill for you.

See the end of year Self Assessment report or explore quarterly reports.

1. Register and get your records together

If your gross trading income exceeds £1,000 in a tax year, you will normally need to register for Self Assessment. Keep all customer receipts, allowable business costs and any CIS deduction statements. Other income can affect the return too.

Start with registration and our tax return preparation guide.

2. Submit the return and check the bill

Use the appropriate HMRC service or compatible software for the tax year and your circumstances. Check the tax calculation and your Self Assessment statement. Look for the balancing payment, payments on account and credits already allocated. An app estimate helps with planning but is not your final HMRC bill.

3. Choose an official payment method

Go directly to GOV.UK’s Self Assessment payment guide. Options include online bank approval, bank transfer, debit card and Direct Debit. Availability, charges and processing time depend on the method. Personal credit cards are not accepted.

Use the current HMRC instructions for bank details and processing times. Avoid copying details from an old screenshot or an unexpected payment email. Allow enough time for your chosen payment to reach HMRC.

4. Use the right reference and check receipt

For a Self Assessment bank transfer, HMRC asks for an 11-character reference: your 10-digit UTR followed by K. For example, a fictional UTR of 1234567890 would give 1234567890K. Follow the reference instructions shown for your actual payment method.

Keep the payment confirmation and check your HMRC account after the relevant processing period. A payment leaving your bank is not the same as confirming it has reached the right tax account.

When is the first payment due?

The usual balancing-payment deadline is 31 January after the tax year ends. If you started in June 2025, your first tax year ends 5 April 2026, notification is normally due by 5 October 2026 and the online return and balancing payment by 31 January 2027. If you started in June 2026, those dates move forward a year.

A first payment on account can also be due in January, followed by a second on 31 July. The first Self Assessment deadline guide helps you identify the correct year.

Why can January cost more than expected?

Suppose the relevant bill is £3,000, no tax has already been paid and payments on account apply. January could require the £3,000 balance plus £1,500 towards the next year: £4,500 in total. A further £1,500 is normally due in July. Those advances are credited against the next year’s liability.

This is a simplified illustration. Exceptions and credits matter. Read payments on account explained and check your HMRC statement.

What if you cannot pay it all?

File the return on time even if you cannot pay in full. Contact HMRC promptly about possible payment arrangements. Eligibility and terms vary; do not assume an instalment plan is automatic or that waiting stops interest.

Does MTD mean paying tax quarterly?

No. MTD quarterly updates report business figures. They do not themselves create four quarterly tax-payment dates. Check your separate filing and payment obligations in the MTD guide. Keep money aside throughout the year using the tax saving guide and calculator.

Sources and further help

Checked 25 October 2026. Pay Self Assessment · Payment reference · Payments on account · Difficulty paying HMRC. Guidance for straightforward sole traders; individual circumstances can change the answer.