Published: July 2026
If you’re self-employed, a landlord, or have income that isn’t taxed through PAYE, you may have heard the term Payment on Account. Every July, many taxpayers receive a reminder from HMRC, but it’s not always clear what it means or why another payment is due.
Here’s a simple guide to help you understand how Payments on Account work and what you need to do before the 31 July deadline.
What is a Payment on Account?
A Payment on Account is an advance payment towards your next Self Assessment tax bill.
Rather than paying all of your tax in one go, HMRC may ask you to make two advance payments each year based on your previous year’s tax bill.
The payments are usually due on:
- 31 January – First Payment on Account
- 31 July – Second Payment on Account
These payments contribute towards your next year’s tax liability.
Who has to make Payments on Account?
You may need to make Payments on Account if:
- Your Self Assessment tax bill was more than £1,000, and
- Less than 80% of your tax was collected through PAYE.
This commonly applies to:
- Sole traders
- Self-employed individuals
- Landlords
- People with investment income
- Company directors with additional untaxed income
If you’re unsure whether this applies to you, it’s worth checking before the deadline.
What happens if I miss the 31 July deadline?
Missing the deadline can result in:
- Interest being charged on the outstanding amount.
- Additional costs if the payment remains unpaid.
Paying on time helps avoid unnecessary charges and keeps your tax affairs up to date.
Can Payments on Account be reduced?
Yes.
If you believe your income for the current tax year will be lower than the previous year, you may be able to apply to reduce your Payments on Account.
However, it’s important not to reduce them without good reason. If they are reduced too much and additional tax is due later, HMRC may charge interest on the shortfall.
Seeking advice before making changes can help avoid unexpected costs.
Need help with your Self Assessment?
At Mays Accounting Services, we help individuals and small businesses prepare and submit accurate Self Assessment tax returns.
Whether you need help understanding Payments on Account, meeting HMRC deadlines or completing your tax return, we’re here to provide clear, practical support.
If you’re unsure whether you need to make a Payment on Account, or you’d like help completing your Self Assessment tax return, we’re here to help. Get in touch for friendly, professional support.
👉 Learn more about our Self Assessment Tax Return Service
Frequently Asked Questions
Can I pay my Payment on Account early?
Yes. You don’t have to wait until 31 July. Paying early can help you budget and ensures your payment reaches HMRC before the deadline.
What if I can’t afford my Payment on Account?
You should contact HMRC as soon as possible. They may be able to agree a Time to Pay arrangement depending on your circumstances.
Final Thoughts
Understanding your Self Assessment obligations can help you avoid unnecessary stress, interest and penalties. If you’re unsure whether you need to make a Payment on Account or have questions about your Self Assessment tax return, getting advice early can make the process much easier.
At Mays Accounting Services, we’re here to provide clear, practical support so you can meet your HMRC deadlines with confidence.