UK Second Payment on Account Due 31 July 2026: What Sole Traders Owe

HM Revenue & Customs reminded Self Assessment taxpayers in June 2026 that the second payment on account for the 2025–26 tax year is due by midnight on 31 July 2026. This is one of the largest cash-flow dates in the UK sole trader calendar — often overlooked between January filing season and the summer VAT changes.

Payments on account spread last year's tax bill across two instalments: half due 31 January and half due 31 July. They apply when your previous Self Assessment liability exceeded £1,000 and less than 80% of tax was collected at source through PAYE or other withholding.

The July payment equals 50% of your 2024–25 Self Assessment liability — the bill you settled (or began paying) by 31 January 2026. It is an advance towards 2025–26, not a final settlement for that year.

Check your HMRC online account or the HMRC app for the exact figure. Do not guess from memory — underpayment accrues interest, currently charged at HMRC's published late-payment rate.

If you filed your 2024–25 return late or amended it after January, the payment on account figure may have updated. Refresh your account before transferring funds.

If you reasonably expect 2025–26 profits to fall sharply, you may reduce July's payment through your HMRC online account or form SA303. This is legitimate when income has genuinely dropped — not merely to defer cash flow without cause.

Reduce too far and HMRC charges interest on the shortfall from 31 July until the balancing payment is made. Keep a brief working paper showing why your estimate is lower.

If you became employed mid-year or moved income into a company, your personal Self Assessment liability may fall — update payments rather than overpaying and waiting for a repayment.

HMRC accepts payment by bank transfer, debit card, and the HMRC app. Time to Pay arrangements can spread larger bills if you contact HMRC before the deadline rather than after it passes.

July's payment on account runs alongside other midsummer obligations — P11D submissions, CIS remittances, and for many businesses the Great British Summer VAT relief window from 25 June to 1 September 2026.

MTD ITSA quarterly updates for the 2026–27 tax year also begin for in-scope taxpayers — strong digital records make both the July payment and Q1 MTD submission easier to reconcile.

Log in to HMRC now, confirm the 31 July amount, and set aside funds. If income has fallen, submit a reduction claim before paying in full.

FinnAccountings estimates your Self Assessment liability from live bank feeds and reminds you before January and July payment dates — start a free trial to see your projected instalments.