What is due on 31 July?
Payments on account are advance instalments for the next tax bill. Each instalment is normally half of your previous Self Assessment liability, after certain deductions such as tax deducted at source. The first instalment is due on 31 January and the second on 31 July. You may also have a balancing payment due on the following 31 January if the final bill is higher than the instalments already paid.
For example, if your 2024/25 Self Assessment liability used for payments on account was £6,000, HMRC would normally set two instalments of £3,000. The 31 July payment is therefore £3,000, even though your final 2025/26 profit may be different. The payment-on-account system can feel like you are paying tax twice, but the advance is credited against the next return rather than lost.
Check the figure before you pay
Start with the tax calculation in your HMRC online account, then compare it with your expected profit, pension contributions and tax already deducted. A take-home estimate can illustrate the income-tax and National Insurance effect of a change in earnings, but it is not a substitute for the Self Assessment calculation, which can also include trading income, property income, dividends and reliefs.
Use the 31 July amount as a cash-flow checkpoint. If you are a contractor or sole trader, set aside the money in a separate account and allow for the next balancing payment as well. Our UK tax and salary calculators can illustrate different income assumptions, while the National Insurance calculator helps explain why a result may differ from a payslip.
When can you ask HMRC to reduce payments on account?
If you have strong evidence that your 2025/26 tax bill will be lower, HMRC allows you to apply to reduce your payments on account. A lower profit, a contract ending, a large pension contribution or a loss may all change the estimate. Make the request through your online account or form SA303, and keep a note of the figures and assumptions used.
Reducing an instalment is not a way to postpone tax without risk. If the final liability is higher than the reduced payments, HMRC can charge interest on the shortfall. Use a conservative estimate, keep supporting records and revisit the calculation when your accounts are final. If the forecast is uncertain, paying the original instalment may be safer than creating a large balancing bill.
Making Tax Digital: the next date to watch
HMRC has confirmed that sole traders and landlords with annual turnover above £50,000 who are in scope of Making Tax Digital for Income Tax must submit quarterly updates. For the 2026/27 tax year, the first quarterly submission deadline is 7 August 2026. The update covers the period from the start of the tax year to the end of the quarter, so your records need to be complete rather than based on a last-minute total.
The July payment and the August digital-update deadline are separate obligations. Paying the instalment does not submit a quarterly update, and submitting an update does not settle the tax bill. If you are newly in scope, check compatible software and your HMRC sign-up status early. Keep digital records so the figures feeding your return and your cash-flow plan agree.
A practical checklist
Before 31 July, confirm the amount shown in your HMRC account, check whether a balancing payment is also due, and schedule the payment using a method that gives you a receipt. Do not rely on a text or email link claiming to be HMRC; open GOV.UK directly and use your usual sign-in. If your circumstances have changed, contact HMRC or a qualified adviser rather than guessing.
After the payment, update your cash-flow forecast and keep the confirmation with your records. The most useful number is not just the instalment itself but the total amount you may need before the next 31 January deadline. Turning the tax calculation into a monthly saving target makes the next payment less disruptive.
Open the matching calculator, save the result in My Toolkit and compare it with the next decision in the same journey.
FAQ
Frequently asked questions
Short answers first. Open the question if you want the detail behind the result.
What is the 31 July 2026 Self Assessment payment?
It is normally the second payment on account towards your next Self Assessment bill, usually set at half of the previous liability used by HMRC.
Can I reduce my payment on account?
Yes, if you have reasonable grounds to expect a lower final bill. Interest can apply if the reduction is too low and a shortfall remains.
Is the July payment the same as a Making Tax Digital submission?
No. The payment settles tax in advance; a quarterly Making Tax Digital update reports income and expenses for the relevant period.
What happens if I miss the deadline?
Late-payment interest and penalties may apply. Check the current HMRC guidance and contact HMRC promptly if you cannot pay in full.
Sources
External links open the official source used to review this guide.