Self-Employed: Your Second Payment on Account Is Due 31 July — Here's How to Check and Reduce It
If you're self-employed, a landlord, or otherwise file a Self Assessment return, 31 July 2026 is your deadline for the second "payment on account" toward your 2025/26 tax bill — and missing it...
Self-Employed: Your Second Payment on Account Is Due 31 July — Here's How to Check and Reduce It
If you're self-employed, a landlord, or otherwise file a Self Assessment return, 31 July 2026 is your deadline for the second "payment on account" toward your 2025/26 tax bill — and missing it triggers interest from day one.
What a payment on account actually is
Payments on account are HMRC's way of spreading your estimated tax bill across the year instead of one lump sum every January. If your last Self Assessment bill was over £1,000 (and less than 80% of your tax was collected at source, e.g. via PAYE), HMRC automatically splits your estimated liability into two advance payments: one due 31 January, and a second due 31 July, each equal to half of what you owed the previous year. Any shortfall or overpayment is then reconciled the following January.
Why this catches people out
The system assumes your income this year will roughly match last year's. If your profits have fallen — a slow year, a change in circumstances, fewer clients — you could be paying HMRC based on a bill you'll never actually owe. Conversely, if profits have risen, the January "balancing payment" can come as an unpleasant surprise on top of your first payment on account for the following year.
Checklist: managing your 31 July payment
- Check your HMRC online account or Self Assessment statement for the exact amount due — don't rely on memory or last year's figure.
- Pay via the HMRC app, online banking, or your personal tax account — nearly two million taxpayers now use the HMRC app for this.
- If your income has genuinely dropped this year, you can apply to reduce your payments on account using form SA303 or through your online account — but be aware that reducing it too far, if your income doesn't actually fall as expected, means interest on the shortfall later.
- Struggling to pay in full? Set up a Time to Pay arrangement via the HMRC app or by phone — monthly or weekly instalments count toward your bill and avoid the harsher late-payment penalties.
- Keep evidence of why you reduced a payment on account (invoices, bank statements showing lower income) in case HMRC queries it later.
What happens if you miss it
Interest accrues daily on any unpaid amount from 1 August, calculated at HMRC's official late-payment rate. Unlike the January deadline, there's no automatic penalty purely for a late July payment — but the interest bill can still add up quickly if you leave it for months, and persistent non-payment can trigger enforcement action.
International comparison
Advance/instalment tax payments for the self-employed aren't a UK quirk. In the US, self-employed taxpayers make quarterly estimated tax payments to the IRS, due in April, June, September and January — a more frequent but similarly-purposed system. Australia's equivalent, Pay As You Go (PAYG) instalments, are calculated quarterly by the Australian Taxation Office based on prior income, with taxpayers able to vary the instalment amount if their circumstances change — directly comparable to the UK's SA303 reduction process.
Key Numbers
- 31 July 2026 — second payment on account deadline
- £1,000 — minimum prior-year tax bill that triggers payments on account
- 80% — proportion of tax collected at source below which payments on account apply
Sources
- Taxpayers urged to get ahead of July Self Assessment payment deadline — Business News Wales
- Understand your Self Assessment tax bill: Payments on account — GOV.UK
- If you cannot pay your tax bill on time — GOV.UK
Educational content only — not financial advice.