Self-Assessment Tax Return: Missed Your Second Payment on Account?
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If you’re self-employed or need to file a self-assessment tax return in the UK, you may already know about payments on account. But what happens if you miss the second payment due in July? Let’s break it down step by step.
What is the ‘second payment on account’ for Self-Assessment, and when is it due?
Payments on account are advance tax payments made towards your next self-assessment bill. They help spread the cost of your tax liability across the year instead of paying it all at once.
1st Payment on Account: Due by 31st January
2nd Payment on Account: Due by 31st July
Each payment is normally half of your previous year’s tax bill. Any difference between what you’ve paid and your actual tax bill is settled with a balancing payment the following January.
What happens if I miss the 31st July deadline for the second payment?
If you miss the deadline, HMRC will start charging interest from 1st August on the unpaid tax.
- Current late payment interest (as of July 2025): 8.25% (Bank of England base rate + 4%).
In addition, HMRC can apply late payment penalties:
- 30 days late → 5% penalty on unpaid tax
- 6 months late → another 5% penalty
- 12 months late → further 5% penalty
These charges can add up quickly if you don’t act.
If I can’t afford to pay right now, what should I do?
Don’t ignore it. Instead, contact HMRC as soon as possible to avoid further penalties.
HMRC may offer a Time to Pay arrangement, allowing you to spread the bill into monthly instalments. You may qualify if:
- Your debt is less than £30,000
- You’re less than 60 days late
- Your tax returns are up to date
👉 You can usually apply for this online via your Government Gateway account. Acting quickly shows willingness to comply and stops the debt from escalating.
Will missing the second payment on account affect my future tax return or payments?
Yes. If you don’t make your second payment:
- The amount will still be owed when you file your next return.
- Interest and penalties will keep building until it’s paid.
- If your actual tax bill is higher than expected, your January bill will be even larger.
This can put a serious strain on your cash flow.
How can I plan better next year?
Avoiding last-minute stress is possible with early planning. Here’s how:
Prepare your tax return early:Completing your return soon after the end of the tax year helps recalculate your payments on account. If your income has dropped, you may owe less in July.
Apply to reduce payments on account: If you expect lower income compared to the previous year, you can request HMRC to reduce your July and January instalments.
But be careful: if you reduce them too much and underpay, HMRC will charge interest on the shortfall.
Will preparing my tax return sooner help me?
Yes, absolutely. Early preparation gives you a clearer picture of what you owe and may reduce your second payment on account if your income has fallen. It also gives you more time to budget, save, or arrange a payment plan if needed.
Final Thoughts
Missing the 31st July second payment on account can feel stressful, but you do have options. HMRC charges interest and penalties, so the best step is to act early—whether that’s paying what you can, arranging a Time to Pay plan, or reducing future payments if your income has fallen.
📞 At AMAccountex Ltd, we help self-employed individuals and business owners manage tax deadlines, reduce liabilities, and avoid unnecessary penalties. Get in touch with us today and make tax stress a thing of the past.
