Don’t Miss Your Self-Assessment Payment!

With summer in full swing, many taxpayers may have holidays on their minds – but for the self-employed and those with taxable income, an important financial deadline is fast approaching.

31 July 2026 marks the due date for the second payment on account for the 2025/26 tax year and missing it could prove costly.

What are payments on account?

Payments on account are advance instalments towards your annual tax bill. Instead of paying the full amount in one go the following January, the bill can be split into two payments, one in January and another in July.

Typically, each payment represents half of the previous year’s tax bill. For example, someone who owed £3,000 for the year ending April 2025 would pay £1,500 in January 2026 and a further £1,500 by the end of July 2026.

Who is affected?

Not all taxpayers are required to make payments on account. However, you are required to if:

• Your previous tax bill exceeded £1,000, and
• Less than 80% of your tax was collected at source, through PAYE

This means the system primarily affects the self-employed, freelancers, landlords and those with untaxed income.

The cost of missing the deadline

Delaying payment can cause serious financial consequences. HMRC currently applies interest of 7.75% on late payments, meaning the longer the bill remains unpaid, the more it grows.

While there is no immediate fixed penalty for missing a payment on account deadline, continued non-payment can trigger more serious consequences. These may include debt collection action, court proceedings or, in extreme cases, insolvency action.

Why paying on time matters

Beyond avoiding extra costs, staying up to date with tax payments is key to maintaining financial health.

For business owners and the self-employed, it demonstrates sound financial management and helps avoid disruption. It also allows for more accurate budgeting, reducing the risk of unexpected financial strain later in the year.

Planning ahead

Financial advisers recommend spreading the cost of tax obligations across the year, rather than facing a large bill in one go. Keeping accurate records and regularly reviewing income can also help ensure payments are manageable.

Those who anticipate difficulties are advised to contact HMRC as early as possible. Support options may be available, particularly for those who engage with the process proactively.

A timely reminder

While it may not be the most exciting date in the calendar, meeting the 31 July deadline can help taxpayers avoid unnecessary stress and additional charges. As the summer continues, those affected are urged to ensure their tax affairs are in order, before the cost of delay begins to add up.

 

Maebh Warnock is a trainee accountant technician, at Abac Chartered Accountants.

This article is for general information only. You are recommended to seek professional advice before taking action on the basis of the contents of this article.