Why do I have to pay tax twice a year to HMRC?

You do not pay tax twice for the same year. HMRC asks for Payments on Account — advance payments towards your next tax bill. Each payment is roughly half of your previous year's tax liability. When you file your actual tax return, these advance payments are deducted from the final bill. If you overpaid, you get a refund. If you underpaid, you pay a balancing payment.

How do I reduce my Payments on Account?

You can reduce Payments on Account if you expect your next year's tax bill to be lower. Log in to your HMRC online account, go to Self Assessment, and select 'Reduce Payments on Account'. You can also do this via form SA303. Be careful: if you reduce them too much and your actual bill is higher, HMRC charges interest on the shortfall from the original due date.

What happens if I miss the 31 July Payment on Account?

If you miss the 31 July deadline, HMRC charges interest from 1 August at the prevailing rate (currently around 7.75% per annum). There is no immediate penalty for being a few days late, but interest accrues daily. If you are more than 30 days late, a 5% penalty is added to the unpaid amount. Further penalties apply at 6 and 12 months.

Do Payments on Account include Class 2 and Class 4 NICs?

Yes. Payments on Account are based on your total Self Assessment bill, which includes Income Tax, Class 4 National Insurance contributions, and any Student Loan repayments due through Self Assessment. Class 2 NICs are collected through Self Assessment and are therefore included in the calculation. However, Capital Gains Tax is excluded from Payments on Account and is paid all at once via the balancing payment.

Property

Stamp Duty Guide 2026: How Much Will You Pay on Your Property?

📅 Updated 2 June 2026 ⏱ 9 min read ✍️ PayToolkit Editorial

Stamp Duty Land Tax (SDLT) is one of the largest upfront costs when buying property in England and Northern Ireland. For a typical home purchase at £300,000, the bill can run to several thousand pounds. Understanding how it is calculated — and what reliefs you might qualify for — can make a meaningful difference to your budgeting.

What is Stamp Duty?

Stamp Duty Land Tax is a tax paid to HMRC when you buy property or land above a certain price in England and Northern Ireland. Scotland has its own equivalent called Land and Buildings Transaction Tax (LBTT), and Wales charges Land Transaction Tax (LTT). The principles are similar across all three, but the rates and thresholds differ.

Stamp Duty is paid by the buyer, not the seller. You have 14 days from completion to file a return and pay any SDLT due.

Standard Stamp Duty Rates for 2026

SDLT is calculated in bands, similar to Income Tax. You pay the relevant rate on each portion of the purchase price that falls within each band, not the rate on the whole purchase price.

For residential property purchases in England and Northern Ireland in 2026:

Up to £250,000 — 0%
£250,001 to £925,000 — 5%
£925,001 to £1,500,000 — 10%
Over £1,500,000 — 12%

For example, buying a property at £400,000:

0% on the first £250,000 = £0
5% on the remaining £150,000 = £7,500
Total SDLT: £7,500

First-Time Buyer Relief

First-time buyers purchasing a property up to £500,000 benefit from reduced SDLT rates:

Up to £425,000 — 0%
£425,001 to £500,000 — 5%

If you are a first-time buyer purchasing a home for more than £500,000, you do not qualify for this relief and pay the standard rates from the first pound.

To qualify as a first-time buyer, you must never have owned a freehold or leasehold interest in a residential property, anywhere in the world. If you are buying with someone else, both purchasers must be first-time buyers to claim the relief.

Second Home and Buy-to-Let Surcharge

If you are purchasing an additional residential property — a buy-to-let, a holiday home, or a second home — you pay an extra 3% SDLT surcharge on top of the standard rates on the entire purchase price.

Using the same £400,000 example, but as a second property purchase:

Standard SDLT: £7,500
Surcharge: 3% of £400,000 = £12,000
Total SDLT: £19,500

This surcharge applies from the first pound, making the additional property surcharge significantly more expensive than it might initially appear.

The surcharge does not apply if you are replacing your main residence. If you sell your main home on the same day as buying a new one, no surcharge is due. If you buy a new main home before selling your old one, you pay the surcharge initially but can claim a refund within 12 months of selling the old property.

Scotland: Land and Buildings Transaction Tax

In Scotland, LBTT replaced Stamp Duty in 2015. The rates for residential purchases in 2026 are:

Up to £145,000 — 0%
£145,001 to £250,000 — 2%
£250,001 to £325,000 — 5%
£325,001 to £750,000 — 10%
Over £750,000 — 12%

First-time buyers in Scotland get a relief that means no LBTT is due on purchases up to £175,000.

Wales: Land Transaction Tax

Wales introduced LTT in 2018. Main residential rates in 2026:

Up to £225,000 — 0%
£225,001 to £400,000 — 6%
£400,001 to £750,000 — 7.5%
£750,001 to £1,500,000 — 10%
Over £1,500,000 — 12%

Non-Residential and Mixed-Use Property

Commercial property, farmland, and mixed-use properties (such as a shop with a flat above) are subject to different SDLT rates, generally lower than residential rates. The second home surcharge does not apply to non-residential purchases, which is why some investors consider mixed-use transactions when the additional surcharge would otherwise apply.

Calculate your exact Stamp Duty bill
Use our free Stamp Duty Calculator for England, Scotland and Wales. Includes first-time buyer relief, second home surcharge and buy-to-let rates. Instant results.

When Does Stamp Duty Not Apply?

SDLT is not due in several circumstances:

When property is transferred as a gift with no money changing hands
When property is left in a will
When property is transferred as part of a divorce or civil partnership dissolution
When a freehold property is purchased for under £40,000

How to Pay Stamp Duty

In practice, your solicitor or conveyancer calculates and pays SDLT on your behalf as part of the completion process. The cost is included in their completion statement and you transfer the funds to them. The return must be filed and payment made within 14 days of completion — failure to meet this deadline results in automatic penalties and interest charges.

If you are buying without a solicitor (rare but possible for cash purchases), you must file and pay directly through HMRC's online service.