Finance expert Thomas Drury has issued a warning to millions of taxpayers over the looming July 31, 2026, deadline for the second Payments on Account instalment for the 2025/26 tax year. According to HMRC, Payments on Account are advance payments towards a customer's next Self Assessment tax bill, designed to spread the cost by requiring two instalments, each half of the previous year's tax owed. These payments are due by midnight on January 31 and July 31.
Who Must Make Payments on Account?
Taxpayers must make these two payments unless the tax owed last year was under £1,000, or they paid over 80% of the tax owed outside of Self Assessment (e.g., through their tax code or bank interest deductions). HMRC notes that instalments can be paid before filing a tax return.
Consequences of Missing the Deadline
Thomas Drury, co-founder and senior trading analyst at The Investors Centre, warned: “If you are required to make Payments on Account, the July bill is not optional. Missing it can lead to interest and more stress later.” He emphasised that the payments are based on the tax owed last year, not current earnings, which often catches people off guard.
Advice from Experts
Drury advises taxpayers to log in early, check what HMRC says is owed, and verify whether that figure still reflects their current financial situation. “The biggest mistake is waiting until the last week of July and then panicking,” he said. HMRC recommends filing early to establish the exact amount owed, aiding budgeting and financial planning.
How to Pay
Payments can be made via the HMRC app (the quickest method), GOV.UK, cheque, or telephone banking. Taxpayers can also set up monthly or weekly payment plans, with any payments made counting towards the next Self Assessment bill. HMRC directs people to search “Pay your Self Assessment tax bill” on GOV.UK for the best payment option. The deadline for submitting tax returns and paying any remaining tax for the 2025/26 tax year is January 31, 2027.
