HM Revenue and Customs (HMRC) has reminded millions of Self Assessment taxpayers that the second Payments on Account instalment is due by July 31, urging them not to delay payment. Payments on Account are advance contributions towards the next tax bill, based on the previous year's tax liability. The first instalment was due on January 31, and the second must be paid by midnight on Thursday, July 31.
What Are Payments on Account?
Payments on Account are designed to spread the cost of a tax bill across two equal instalments, each typically half of the previous year's tax bill. Any remaining balance after filing the tax return is due by the following January 31. HMRC encourages customers to pay early using various methods, including the HMRC app, online banking, bank transfer, or Direct Debit.
According to HMRC, nearly two million Self Assessment taxpayers have used the HMRC app for payments since its launch in January 2022. The app also allows users to set reminders, track payments, and view history.
Support for Taxpayers
Myrtle Lloyd, HMRC's Chief Customer Officer, stated: "We know managing a Self Assessment tax bill isn't always straightforward and we are here to help. From paying instantly via the HMRC app to spreading the cost through a payment plan, there's support available for every customer." Taxpayers who cannot pay in full may set up a payment plan to spread costs over monthly or weekly instalments. Payments made under such plans count towards the next bill.
Not everyone must make Payments on Account. Exemptions apply if the previous tax bill was under £1,000 or if more than 80% of tax was already collected via PAYE or tax code adjustments. Those expecting a lower tax bill this year can apply to reduce their Payments on Account, but HMRC warns that reducing too much may incur interest if insufficient tax is paid.
Upcoming Changes and Reminders
The deadline for filing the 2025-26 Self Assessment tax return and paying any remaining tax is January 31, 2027. HMRC advises early filing to know the amount owed sooner. From mid-July, around 300,000 customers liable for the High Income Child Benefit Charge will have Child Benefit information auto-populated in their online returns, simplifying the process.
HMRC also reminds taxpayers to update personal details and notify the department if they no longer need to file a Self Assessment return, for instance, after ceasing self-employment or closing a business.
