A payment on account is an advance instalment toward a future tax bill, based on your previous year's liability. Rather than paying all tax in one lump sum after the year ends, taxpayers, especially the self-employed, prepay tax during or shortly after the year so that collection is spread out and closer to when income is earned.
In the UK self-assessment system, each payment on account is typically 50% of the prior year's tax bill, due on 31 January and 31 July, with a balancing payment settling any difference. Italy uses acconto instalments, France and Spain operate withholding and advance-payment schemes (pagos fraccionados in Spain), and the US requires quarterly estimated tax payments for income not covered by withholding.
Example: your tax bill last year was 4,000. You might pay 2,000 in January and 2,000 in July toward the current year. If this year's actual liability turns out to be 5,000, a balancing payment of 1,000 falls due, alongside the next set of instalments.
Because these payments can arrive before you have set the cash aside, planning matters. Use our tax set-aside calculator to reserve enough, and see tax year and tax deduction.