An HMRC deadline is weeks away (Image: Laurence Berger via Getty Images)
Experts are alerting everyone who submits a tax return as a crucial deadline approaches, with one cautioning that “many who are new to freelancing often get caught out”. With just one month remaining, HM Revenue and Customs (HMRC) is reminding millions of Self Assessment taxpayers to prepare for the 2025 to 2026 tax year second payments on account July 31 deadline.
Customers can establish monthly or weekly payment arrangements and any payments already made through these schemes will be credited towards their next Self Assessment tax bill. Payments can be processed via the HMRC app, with nearly two million Self Assessment taxpayers utilising it since its launch in January 2022.
It enables people to pay towards their tax liability, set payment reminders and monitor and review their payment history.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “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. Search ‘Pay your Self Assessment tax bill’ on GOV.UK to choose the payment option that works for you.”
Matthew Knight, chief freelance officer at Freelancing.Support, said many people did not know the deadline.
There are penalties for missing the deadline (Image: coldsnowstorm via Getty Images)
He added: “While everyone knows the January 31 deadline, many who are new to freelancing often get caught out by payment-on-account deadlines, which asks you to pay your taxes ahead of your income. Getting into the habit of doing your accounts monthly or quarterly helps you keep on top of the admin, rather than waiting for HMRC to remind you. This is where Making Tax Digital could actually help small businesses, ensuring they’re on top of their taxes.”
Ross Lacey, director and Independent Financial Adviser at Rayleigh-based Fairview Financial Management, said it was important to keep your books up to date.
He added: “It’s good practice to get on top of this as early as possible. That way, you can ensure the payments on account remain appropriate for the level of income you’ve actually earned.
“It also helps with any changes you may want to make to your business in the current tax year, using the information on how much profit, or not, was generated in the previous tax year. Far too many people are almost a year behind in knowing how their business is really doing. Keeping the book up to date throughout the year makes this less of a mammoth task.”
Samuel Mather-Holgate, managing director and IFA at Swindon-based Mather and Murray Financial, said “silence is usually the most expensive option”.
He added: “The Self Assessment system is creaking because it asks millions of ordinary people to behave like unpaid tax administrators. Staying up to date matters. If you miss the July 31 payment on account you can quickly face interest, penalties and nasty cash-flow shocks.
“But HMRC cannot keep relying on last-minute nudges and an app to fix a system many people find confusing. There should be far clearer prompts, plainer language and earlier warnings, especially for the self-employed and side-hustlers.
“The practical advice is simple – check your online account now, do not assume payments on account are optional, put money aside weekly, and speak to HMRC before the deadline if you cannot pay. Silence is usually the most expensive option.”
Nouran Moustafa, practice principal and IFA at Roxton Wealth, said taxpayers needed to act before the deadline.
She added: “Self Assessment needs year-round organisation. The July 31 payment catches people off guard because it lands months after the January rush, just when many self-employed people, landlords and business owners are focused on keeping cash moving through the summer.
“Being up to date matters because this is not a bill you can wish away. Missing it can mean interest, stress and a much bigger problem by January, when the balancing payment and next payment on account can arrive together. There is publicity, but not enough explanation. Too many people still misunderstand what a payment on account is, or assume income received is fully theirs to spend.
“My advice is simple: make tax part of managing money all year round. Put aside a percentage of every payment, check your HMRC account now, and only reduce a payment on account where there is a genuine, evidenced reason your income will be lower. If cash flow is tight, act before the deadline, not after it. A payment plan is a tool, not a failure.”