A finance expert has issued a warning to millions of taxpayers over an important deadline looming this month. Thesecond Payments on Account deadline for the 2025 to 2026 tax year falls on Friday, July 31, 2026.
Payments on account are “payments towards a customer’s next Self Assessment tax bill”, HMRC explains. “They help spread the cost of the tax owed by making payments in two instalments. Each payment is half of the tax the customer owed last year. These payments are due by midnight on January 31 and July 31.”
Brits have to make these two payments, with two exceptions. These include if:
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the amount of tax owed last year was under £1,000
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last year they paid over 80% of the tax owed outside of Self Assessment (for example, through their tax code or because their bank had already deducted interest on their savings)
“Payments on account instalments can be paid before a customer has filed their Self Assessment tax return,” the Government department adds.
“The deadline for submitting tax returns and paying any remaining tax owed for the 2025 to 2026 tax year is January 31, 2027.”
HMRC says filing early allows you to establish how much tax you owe sooner, making budgeting and financial planning easier.
You can pay via the app, which HMRC says is the quickest way, or on the GOV.UK, via cheque, or telephone banking etc.
Taxpayers can set up monthly or weekly payment plans. Any payments already made via them count towards the next Self Assessment tax bill, sparing you from suddenly being hit with one big sum.
HMRC directs people to search “Pay your Self Assessment tax bill” on GOV.UK to pick the payment option that works best for their circumstances.
Thomas Drury co-founder and senior trading analyst at The Investors Centre, a UK-based investment platform says: “January is noisy. Everyone talks about the tax return deadline. July is quieter, which is why it catches people out.
However, he warned that “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 added.
He reminded taxpayers that the payments “are based on what you owed last year, not necessarily what you are earning this year”.
“That is the detail people often miss. If your income has dropped, your business has slowed, your expenses have changed, or more tax has already been deducted elsewhere, your July payment may not reflect your current position.”
He adds: “The biggest mistake is waiting until the last week of July and then panicking. You need to log in now, check what HMRC says you owe, and work out whether that figure still makes sense.”