Overview
- Taxpayers who make payments on account must pay their second instalment to HMRC by midnight on Friday, July 31 to avoid extra charges.
- Any unpaid July 31 balance will start attracting HMRC’s 7.75% late‑payment interest from August 1 and the interest will continue until the debt is cleared.
- Payments on account are normally two advance instalments equal to half the previous year’s tax bill and people with a last bill under £1,000 or with 80%+ tax collected at source do not have to pay them.
- HMRC advises using the HMRC app or online payments and offers Time to Pay arrangements for qualifying debts up to £30,000 while taxpayers can apply online to reduce future payments if their 2025–26 liability will be lower.
- HMRC is consulting on moving to nearer‑real‑time payments under Making Tax Digital, a change advisers warn could create cashflow stress for self‑employed people and comes just before many in scope must submit an MTD quarterly update on August 7.