Self Assessment Payment on Account 31 July 2026: What to Pay and When

The Self Assessment payment on account deadline on 31 July 2026 catches plenty of sole traders, landlords, freelancers, and directors because it does not always feel like a real tax bill. It arrives six months after the January rush, often when business cash is tied up in summer costs, VAT, payroll, or quieter trading weeks.

HMRC sees it differently. If payments on account apply to you, your second payment on account for 2025/26 is due by midnight on 31 July 2026. Miss it and late payment interest can start running from the deadline.

Quick summary: payments on account are advance payments towards your next Self Assessment tax bill. Each payment is usually half of the previous year’s tax bill, and the two main deadlines are 31 January and 31 July. You may not need them if your last bill was under £1,000, or if at least 80% of the tax you owed was collected outside Self Assessment.

If July is looking tight, do not leave the calculation until the final week. We can help you check the figures through our Self Assessment service, tidy the records through our bookkeeping service, or talk through the next step via our contact page.

Self Assessment payment on account 31 July 2026: the rule in plain English

Payments on account are payments towards your next tax bill. HMRC says they include Class 4 National Insurance if you are self-employed. They do not exist to punish you, though it can feel that way when January has only just faded from memory. The idea is to split the likely tax cost into two payments rather than letting the whole amount build up for one January hit.

The standard due dates are:

Date	What is usually due
31 January	Balancing payment for the previous tax year, plus first payment on account for the current tax year
31 July	Second payment on account for the current tax year
Following 31 January	Any remaining balancing payment, plus the first payment on account for the next year

For the July 2026 deadline, many taxpayers are paying the second half of their 2025/26 payment on account. The figure should appear in your Self Assessment statement or online account if HMRC expects you to pay it.

Official HMRC pages worth keeping open:

• Understand your Self Assessment bill: payments on account
• Pay your Self Assessment tax bill
• HMRC late payment interest rates
• Budget Payment Plan for Self Assessment

One point matters more than almost anything else: the July payment is normally not recalculated from your live 2026/27 profits. It is usually based on the previous year’s bill. If your income has dropped, you may need to ask HMRC to reduce the payment rather than simply paying less and hoping the system catches up.

Who has to make payments on account

HMRC says you usually need to make payments on account unless one of two exceptions applies.

Test	What it means
Your last Self Assessment tax bill was less than £1,000	Payments on account are usually not required
You paid more than 80% of the tax you owed outside Self Assessment	Payments on account are usually not required

The 80% test is common for people with PAYE income. For example, an employee with a small amount of freelance income may already have most of their tax collected through their salary. A sole trader whose tax is mainly collected through Self Assessment is more likely to fall into payments on account once the bill goes above £1,000.

That is why two people with similar side income can get different HMRC statements. One may have tax deducted through payroll, pension income, or other deductions at source. The other may have income that arrives gross, with no tax taken off. HMRC is looking at how the tax was collected, not only the type of work you do.

If you are newly self-employed, the first year can be a shock. You may pay the full tax bill for the first completed year and the first payment on account for the next year on the same January date. Six months later, the second payment on account follows.

This is one of the reasons we encourage new sole traders to build a tax reserve from the first invoice, not from the first HMRC letter. Our registering as self-employed guide covers the setup side, while our side hustle tax guide walks through the £1,000 trading allowance and basic record-keeping points.

How HMRC calculates the July amount

Each payment on account is usually half of your previous year’s Self Assessment bill. That means the two payments together normally equal the prior year’s bill, before any balancing payment is worked out later.

The basic formula is:

Step	Calculation
Previous Self Assessment bill	Example: £6,000
First payment on account	£3,000 due on 31 January
Second payment on account	£3,000 due on 31 July
Total paid on account	£6,000 towards the current year

It sounds simple. The confusion usually comes from mixing up three different things:

• the actual tax bill for the year just ended
• the payments on account for the year now in progress
• the balancing payment due later if the advance payments were too low

Your Self Assessment statement is the document that pulls those pieces together. HMRC says the statement shows tax owed, payments due, payments already made, outstanding amounts, and any balancing payment. The SA302 tax calculation is useful, but it does not show everything in the same way because it does not include payments on account you have already made.

Worked example 1: a straightforward July payment

Assume Nadia is a self-employed designer. Her 2024/25 Self Assessment bill was £6,000, including Income Tax and Class 4 National Insurance.

HMRC sets payments on account for 2025/26 as:

• first payment on account by 31 January 2026: £3,000
• second payment on account by 31 July 2026: £3,000

If Nadia’s final 2025/26 tax bill later turns out to be £6,800, she has already paid £6,000 on account. The balancing payment due by 31 January 2027 would be:

• £6,800 - £6,000 = £800

She may also have a first payment on account for 2026/27 due on the same January date. That is the part people forget when budgeting. January can contain both a backward-looking balancing payment and a forward-looking payment on account.

Worked example 2: why January felt so large

Assume Leon filed his first Self Assessment return for 2024/25. His tax bill was £4,200. No payments on account had been made before because it was his first year in the system.

His amount due by 31 January 2026 would usually be:

• 2024/25 tax bill: £4,200
• first payment on account for 2025/26: £2,100
• total due in January: £6,300

Then his second payment on account is due by 31 July 2026:

• second payment on account: £2,100

That means Leon pays £8,400 across January and July, although only £4,200 relates to the tax year he has already filed. The rest is an advance towards the next bill.

The system is logical once you see the moving parts. It is still a cash-flow sting if nobody warned you.

Can you reduce your payments on account?

Yes, but reduce them carefully. HMRC says you can ask to reduce payments on account if you know your tax will be lower than last year. You can do that online through your account or by post using form SA303.

Common reasons include:

• profits have dropped
• you stopped self-employment
• rental income has fallen
• you moved more income into PAYE
• one-off taxable income from the prior year will not repeat
• pension contributions or other reliefs are expected to change the bill

Do not reduce the payment just because cash is tight. That is a payment problem, not a calculation problem. If you reduce payments too far and the final bill is higher than expected, HMRC can charge interest on the difference.

Worked example 3: reducing payments after income falls

Assume Priya’s 2024/25 Self Assessment bill was £8,000, so HMRC set her 2025/26 payments on account at:

• £4,000 by 31 January 2026
• £4,000 by 31 July 2026

Priya loses a major contract in April 2025 and her expected 2025/26 tax bill falls to around £4,800.

If that estimate is realistic, she could ask HMRC to reduce total payments on account to £4,800, split into:

• revised first payment: £2,400
• revised second payment: £2,400

If she already paid £4,000 in January, the revised July amount may be much smaller, or there may be nothing extra due for July. The exact online statement position depends on what has already been paid and processed.

Now change the facts. Suppose Priya reduces her payments to £4,800, but her final bill is £7,200. She has underpaid against the payments that should have been made. HMRC can charge interest on the shortfall. That is why the reduction claim should be based on evidence, not optimism.

For sole traders, the evidence might be management accounts, year-to-date profit, cancelled contracts, or a sensible forecast. If your books are behind, reducing payments becomes guesswork. Our bookkeeping service can help get the records into shape before you make a claim.

What happens if you miss the 31 July 2026 deadline?

If your second payment on account is due by 31 July 2026 and you pay late, HMRC can charge interest. The late payment interest rate shown by HMRC at the time of writing is 7.75% from 9 January 2026 for the main taxes and duties listed, including Income Tax and National Insurance contributions. Interest rates can change, so check HMRC’s current rate before relying on a number for planning.

Late payment interest is not the same as a penalty. It is charged because the payment was late. Penalties can also apply in some Self Assessment situations, particularly where January balancing payments remain unpaid for longer periods. For the July payment, the immediate practical issue is usually interest and the stress of an outstanding HMRC balance.

Here is a rough interest example, using 7.75% as the annual late payment interest rate.

Assume your July payment is £3,000 and you pay it 60 days late.

• annual interest at 7.75%: £3,000 x 7.75% = £232.50
• rough 60-day interest: £232.50 x 60 / 365 = £38.22

That example is deliberately simple. HMRC’s actual calculation follows its rules and dates, and rates can change. The point is that interest is not theoretical. It starts turning a missed deadline into a larger bill.

If you cannot pay, do not ignore the account. GOV.UK says you may be able to set up a payment plan if you cannot pay your tax bill in full. If your bill is not overdue and you are trying to build towards the next Self Assessment deadline, a Budget Payment Plan may be more suitable because it lets you make weekly or monthly Direct Debit payments in advance.

How to check what you owe before paying

Start with your HMRC online account. HMRC says you can check payments on account by signing in, viewing your latest Self Assessment return, and selecting View statements. That should show payments made and payments due towards your next tax calculation.

Check the following before you pay:

Check	Why it matters
Is the July amount actually due?	Some taxpayers do not have payments on account
Has your January payment been allocated correctly?	A missing payment can make the account look worse than it is
Are there older balances or interest included?	The total due may include more than the July instalment
Is your payment reference correct?	HMRC usually needs your 10-digit UTR followed by K
Do you need to reduce the payment?	A genuine income drop may justify a formal reduction claim

Payment references are a boring detail that matter. A payment with the wrong reference can sit in the wrong place while the Self Assessment account still shows money due. If you are close to the deadline, check your bank has sent the payment and then check your HMRC account after it has had time to update.

GOV.UK says electronic or online payments sent within the last 7 days can show in the balance area, while processed payments can take up to 7 days to show in the payments and credits section. That delay is annoying, but it is normal.

Cash-flow planning for the July payment

July is a cash-flow problem as much as a tax problem. You may know the amount due and still struggle if the money has not been kept separate.

A simple approach is to split the July amount across May, June, and July.

July payment due	Monthly reserve from May to July
£1,500	£500 per month
£3,000	£1,000 per month
£6,000	£2,000 per month

That does not make the tax cheaper. It does make the deadline less sharp. If your income is uneven, build the reserve from receipts rather than equal calendar months. A contractor paid in two large instalments may need to move money on receipt. A shop or online seller may prefer a weekly percentage of sales.

A useful habit is to run a separate tax pot. When money lands, move a set percentage into the pot before it blends into everyday business cash. For many self-employed people, 25% to 30% of profit is a sensible starting reserve, though your exact figure depends on total income, tax band, National Insurance, student loans, pension contributions, and other reliefs.

If you are also in the Making Tax Digital for Income Tax group from April 2026, quarterly updates will make record-keeping more frequent. They do not remove the need to understand payments on account. Our MTD for Income Tax checklist is a good next read if your income is near the threshold and you are still using annual catch-up bookkeeping.

Common mistakes with the second payment on account

The same mistakes show up every summer.

Treating the July payment as optional

If it appears on your Self Assessment statement and no reduction claim applies, treat it as a real deadline. The fact that it is an advance payment does not make it voluntary.

Reducing payments because cash is tight

HMRC lets you reduce payments when the expected tax bill is lower. That is different from being unable to pay. If affordability is the problem, look at payment options rather than making an inaccurate reduction claim.

Forgetting Class 4 National Insurance

Payments on account include Class 4 National Insurance where relevant. Sole traders sometimes estimate Income Tax and forget the National Insurance part, which leaves the reserve short.

Assuming PAYE means no Self Assessment payment

PAYE helps, but it does not automatically remove payments on account. The key question is whether at least 80% of the tax owed was collected outside Self Assessment and whether the previous bill met the rules.

Waiting for HMRC to remind you

Do not rely on post. If you filed online, the account is there to check. If your statement is confusing, deal with it early while there is still time to correct references, reduce payments properly, or arrange help.

A practical checklist before 31 July 2026

Use this before the final week of July.

Task	Done
Log in to HMRC and check the Self Assessment statement
Confirm the second payment on account amount
Check January’s payment is showing correctly
Decide whether a reduction claim is genuinely needed
Review year-to-date profit or rental income
Move funds into a tax reserve before the payment date
Pay using the correct Self Assessment reference
Save proof of payment and check HMRC allocation afterwards

If you want a second pair of eyes before July, speak to our team. Bring the HMRC statement, your latest bookkeeping, and any forecast you have. With those three pieces, we can usually tell whether the July amount looks right, whether a reduction claim is reasonable, or whether the focus should be payment planning instead.

FAQ: Self Assessment payment on account 31 July 2026

What is the Self Assessment payment on account deadline in July 2026?

The second payment on account deadline is 31 July 2026. HMRC expects payment by midnight if the amount is due on your Self Assessment account.

Do I always have to make payments on account?

No. HMRC says you usually do not need payments on account if your last Self Assessment bill was less than £1,000, or if you paid more than 80% of the tax you owed outside Self Assessment.

How much is each payment on account?

Each payment is usually half of your previous year’s Self Assessment tax bill. For example, a previous bill of £6,000 normally creates two payments on account of £3,000 each.

Can I reduce my July payment on account?

Yes, if you know your tax bill will be lower than last year. You can ask HMRC online or by post using form SA303. If you reduce it too far, interest can be charged on the difference.

What happens if I pay the July amount late?

HMRC can charge late payment interest. The current late payment interest rate shown by HMRC at the time of writing is 7.75% from 9 January 2026, though rates can change.

Can I set up monthly payments before the deadline?

If you are up to date with Self Assessment, GOV.UK says you may be able to set up a Budget Payment Plan to make weekly or monthly Direct Debit payments towards your next bill.

The sensible next move

Log in to HMRC this week, confirm whether a July payment is due, and compare it with your current-year profit. If the amount is right, build the cash reserve now. If it looks wrong because your income has fallen, gather evidence before asking HMRC to reduce it. Guessing in July tends to make January more expensive.