Self-Assessment Payment on Account Due 31 July: How to Pay and Avoid a Penalty

If you're self-employed or file a Self Assessment return, 31 July 2026 is a date worth putting in the diary. It's the deadline for your second Self Assessment payment on account of the tax year — and missing it triggers interest from day one.

What a "payment on account" actually is

If your last tax bill was over £1,000 and you didn't pay most of your tax at source (through PAYE), HMRC requires two advance payments toward your next bill: one by 31 January and one by 31 July, each usually equal to half of your previous year's tax bill. Think of it as HMRC spreading your estimated tax liability across the year rather than asking for it all at once in January.

What's new this year

From mid-July 2026, HMRC is pre-populating Child Benefit payment information on the online Self Assessment return for around 300,000 taxpayers affected by the High Income Child Benefit Charge, making that section of the return faster to complete correctly. It won't change what you owe, but it should reduce errors.

What happens if you miss the deadline

Unlike the January deadline, there's no automatic late-filing penalty tied to 31 July since you're not filing anything — but HMRC starts charging interest on the unpaid amount from 1 August, currently calculated at the Bank of England base rate plus a margin. That interest compounds daily, so a payment left unpaid for months can add up.

Checklist before 31 July:

• Log into your personal tax account or Self Assessment portal to confirm the exact amount HMRC expects.
• Check your bank details are set up for the fastest payment method — online banking or debit card clears same or next day; cheques take longer.
• If your income has genuinely dropped this year, you can apply to reduce your payments on account rather than overpay and wait for a refund.
• If you can't pay in full, contact HMRC before the deadline to discuss a Time to Pay arrangement — this is far cheaper than defaulting and accruing interest.
• Keep a record of your payment reference and confirmation in case of any dispute later.

How this compares abroad

Quarterly or biannual advance tax payments aren't unique to the UK. In the US, the IRS requires quarterly estimated tax payments from self-employed people, due in April, June, September and January. Australia's ATO uses a Pay As You Go (PAYG) instalment system with similar quarterly timing. The UK's twice-yearly structure is comparatively less frequent, but the underlying principle — pay tax in advance based on last year's income — is common across all three systems.

Key Numbers

• 31 July 2026 — deadline for the second payment on account
• £1,000 — tax bill threshold above which payments on account usually apply
• 300,000 — Self Assessment customers getting pre-populated Child Benefit data this year
• 1 August — date interest starts accruing on unpaid amounts

Sources

• GOV.UK: Taxpayers urged to get ahead of July Self Assessment payment deadline
• GOV.UK: Understand your Self Assessment tax bill — Payments on account
• ICAEW: Tax news in brief, 1 July 2026
• GOV.UK: If you cannot pay your tax bill on time

Educational content only — not financial advice.