With just over a month to go until a significant date in the UK tax calendar, millions of taxpayers are being urged to act without delay. The next HMRC self-assessment payment on account deadline falls on July 31, 2026. The deadline applies to self-employed workers, freelancers, landlords and business owners. Those obliged to make payments on account must submit their second instalment for the 2024/25 tax year by July 31.
What is a Payment on Account?
A payment on account is an advance contribution towards a taxpayer's forthcoming tax bill, calculated on the basis of their previous year's tax liability. While many are well acquainted with the self-assessment filing deadline in January, the July payment has a habit of catching people off guard.
Payments on account apply to taxpayers whose self-assessment tax bill exceeds £1,000 and where less than 80% of their tax has been collected at source.
Consequences of Missing the Deadline
Missing the deadline can trigger a late payment interest charge — currently as high as 7.75% on outstanding tax, calculated on a daily basis — and may attract heightened scrutiny from HMRC, potentially leading to a closer examination of an individual's tax affairs.
Expert Warning
Seb Maley, CEO of tax insurance firm Qdos, said: "The January tax return deadline gets all the attention, but July is another big date in the tax calendar that can easily catch people out. For many self-employed workers, it's one that can easily be overlooked and can feel like a nasty surprise landing in the middle of summer. But the worst thing you can do is bury your head in the sand. With the deadline now just a month away, it's vital to check what you owe and make sure you're prepared. Missing the payment can quickly become costly, with interest charges adding up and HMRC potentially taking a closer look at those who fail to pay on time."
HMRC Payments on Account Explained
HMRC explains: "Payments on account are payments towards your next tax bill (including Class 4 National Insurance if you're self-employed). They help spread the cost of your tax by making payments in 2 instalments. Each payment is half of the tax you owed last year. These payments are due by midnight on January 31 and July 31. You must make these two payments, unless either the amount of tax you owed last year was less than £1,000 or last year you paid more than 80% of the tax you owed outside of Self Assessment (for example through your tax code or because your bank had already deducted interest on your savings). Your Self Assessment statement or online account will show you how much they are, if you need to pay them."
How HMRC Payments on Account Are Calculated
HMRC adds: "Payments on account are calculated based on your estimated earnings (usually the amount you earned the previous year). Each payment is usually half of the tax you owed the previous year. If you actually earn more than estimated, you may still have tax to pay on top of your payments on account. This is known as a 'balancing payment'. If you earn less than estimated, you may be able to claim a tax refund."
