One month to go: what to do if you can't pay the July self-assessment bill

There's just one month to go until the 31 July self-assessment payment deadline.

If you make Payments on Account, HM Revenue and Customs (HMRC) is reminding millions of taxpayers that the second instalment for the 2025/26 tax year is due by midnight on 31 July.

If you're worried about paying, don't ignore it. Acting early could save you money and help you avoid additional penalties.

What are Payments on Account?

Payments on Account are advance payments towards your next self-assessment tax bill. They spread the cost of your tax over the year, rather than leaving you with one large payment.

You normally make two payments:

• 31 January – the first payment, alongside any balancing payment for the previous tax year.
• 31 July – the second payment.

Each instalment is usually half of the previous year's tax bill.

What happens if you miss the 31 July deadline?

If you don't pay by the deadline, HMRC will immediately start charging late payment interest on the outstanding amount.

If the tax remains unpaid after 30 days, six months or 12 months, you'll also face escalating late payment penalties of 5% of the unpaid tax at each stage.

HMRC says the quickest way to pay is through the HMRC app, which also allows you to set up weekly payments to help spread the cost.

What if you can't afford to pay?

If you know you'll struggle to pay, contact HMRC as soon as possible.

The sooner you get in touch, the more options you may have. Leaving it until after the deadline means interest will continue to build and additional penalties could apply.

If you can't pay your bill in full, you may be able to set up a Time to Pay arrangement, allowing you to pay in instalments. HMRC will assess whether the proposed payments are affordable.

If you can't agree a payment plan, HMRC will expect you to pay the amount owed in full.

Can you reduce your Payments on Account?

If you expect your income or profits to be lower than last year, you may be able to reduce your Payments on Account.

For example, you might qualify if:

• your business profits have fallen
• you've moved into employment where tax is deducted through PAYE

However, only reduce your payments if you're confident your tax bill will be lower. If you reduce them too much, HMRC will charge interest on the shortfall.

Don't forget to file your tax return

Even if you can't afford to pay your tax bill, it's still important to submit your self-assessment tax return on time.

If you're self-employed or receive income that hasn't already been taxed, you generally need to file a tax return, even if you made little or no profit.

Submitting your return on time helps you avoid separate late filing penalties.

Need help with your tax return?

Free help and guidance on completing and submitting your self-assessment return is available on GOV.UK.