A balancing payment is a payment made to HM Revenue and Customs (HMRC) to settle any outstanding tax liabilities at the end of a tax year. It is the difference between the amount of tax that has been paid throughout the year and the amount that is actually owed based on the individual's or business's total income and tax liability for the year.

Balancing payments are typically made by individuals who are self-employed or have income from sources that are not taxed at source, such as rental income, investment income, or capital gains. If an individual has underpaid their tax during the year, they will be required to make a balancing payment to HMRC to cover the remaining amount. On the other hand, if an individual has overpaid their tax during the year, they may be entitled to a refund from HMRC.

Balancing payments are usually due by January 31st of the year following the end of the tax year, which runs from April 6th to April 5th. It's important to make the payment on time to avoid any penalties or interest charges. HMRC will typically send a tax bill to the taxpayer by post or online, which will include details of the balancing payment that is due.

If an individual is having difficulty making a balancing payment, they should contact HMRC as soon as possible to discuss payment options, such as setting up a payment plan or requesting a time to pay arrangement.