Self Assessment July 31st Payment on Account Deadline

If you're registered for Self Assessment, the July 31, 2025 deadline for your second payment on account is today. And with HMRC tightening the reins on late payments, the cost of missing this date is higher than ever. ‘Payments on account’ are payments towards your next tax bill (including Class 4 National Insurance if you’re self-employed).

How payments on account are calculated

Payments on account are calculated based on your estimated earnings (usually the amount you earned the previous year). Each payment is usually half of the tax you owed the previous year.

What’s Changed?

HMRC’s interest rate on late tax payments has risen sharply-from 3.5% to 8.25%. That’s more than double what it was just a couple of years ago. This increase is part of a wider effort by HMRC to clamp down on unpaid tax.

The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are:

• late payment interest rate - 8.25% from 28 May 2025

• repayment interest rate - 3.25% from 28 May 2025

What Does That Mean in Real Terms?

If you owed £10,000 for your second payment on account and didn’t pay until December 31st, 2025. You’d be looking at almost £350 in interest alone, on top of the amount owed. That’s essentially the cost of missing the deadline by five months.

• Annual interest: £10,000 × 8.25% = £825

• Monthly (approximate): £825 ÷ 12 = £68.75 per month

So, if you were late by 5 months (e.g. from July 31 to December 31), you’d pay around:

£68.75 × 5 = £343.75 in interest.

Why It Matters

The penalty might seem small compared to the tax bill itself, but these charges add up quickly-especially if cash flow is tight or you’re already juggling other payments. And interest is charged daily, so the longer the delay, the more you’ll owe.

What You Can Do

If you've missed the deadline, it’s best to pay as soon as possible to reduce additional charges. If you’re struggling to pay, HMRC may offer a Time to Pay arrangement, which lets you spread your tax bill over monthly instalments-though interest will still apply.

If you’re unsure what’s due or whether a payment on account applies to you, now’s the time to check in with your accountant.

Need Help?

At Styles & Associates, we help clients stay on top of their tax obligations-and avoid costly surprises. Get in touch for professional Self-Assessment services for the next tax year.

Source: Gov.uk