With just weeks remaining until a major date in the UK’s tax calendar, millions of taxpayers are being urged to take action ahead of the 31st July Payment on Account deadline.
The deadline affects self-employed workers, freelancers, landlords and business owners. Those required to make Payments on Account must make their second instalment for the 2024/25 tax year by 31st July 2026.
The Payment on Account is an advance payment towards a taxpayer’s next tax bill, based on their previous year’s tax liability. While many are familiar with the self-assessment filing deadline in January, the July payment often catches people off guard.
Payments on Account apply to taxpayers whose self-assessment tax bill is more than £1,000 and where less than 80% of their tax has been collected at source.
Failure to pay by the deadline can result in a late payment interest charge – which is currently as high as 7.75% on outstanding tax, calculated daily – and can attract greater attention from HMRC, potentially leading to further scrutiny of an individual’s tax affairs.
Seb Maley, CEO of tax insurance firm, Qdos, said: “Meeting this looming tax deadline isn’t just about paying HMRC what you owe – it can be important in preventing unwanted attention from the tax office. A failure to meet your tax obligations – whether that’s missing payments or not filing accurate tax returns – is a red flag to HMRC and could result in an enquiry or even investigation.
“That’s why the often-overlooked July payment deadline is one self-employed workers can’t afford to ignore. Overshadowed by January’s Self Assessment deadline, it’s easy to forget about the second Payment on Account until it arrives.
“With the deadline fast-approaching, it’s important that you’re prepared. Not only will you be hit with interest on late payments, but it could also trigger an investigation – which can be a costly, altogether stressful ordeal.”
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