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If you’re self-employed, there’s an important tax deadline looming that could prove costly if you miss it.
Around 3m taxpayers who work for themselves have until 31 July to make their second Self-Assessment payment on account, with interest charges applying to any unpaid tax after this date.
You may also need to make a payment if you receive income that isn’t taxed automatically, such as rental income or investment income, and your previous Self-Assessment tax bill was more than £1,000.
Payments on account are effectively advance payments towards your next tax bill. They’re usually made in two instalments each year, one by 31 January and the second by 31 July, based on your previous year’s tax liability.
You can view any payments due by signing into your HMRC online account. This will show whether you need to make a payment on account by 31 July and how much is owed.
What happens if you miss the July 31 deadline?
You’ll start being charged interest on any outstanding balance after 31 July, with HMRC currently charging a hefty 7.75% on late payments. The longer the amount remains unpaid, the more expensive your bill could become.
If you discover that you do owe tax but making the payment will be difficult, it’s worth speaking to HMRC as soon as possible. They might be able to suggest ways for you to manage the debt, perhaps by paying it off gradually rather than in a lump sum, whereas delaying could lead to additional interest charges and, in some cases, penalties.
The 31 July deadline is also a useful reminder to plan ahead for future tax payments. Setting aside money regularly, using HMRC’s Budget Payment Plan or seeking professional financial guidance can help make future bills easier to manage and reduce the likelihood of a last-minute scramble.
What do I need to do to prepare for the January 31 deadline next year?
You’ll usually need to submit a Self-Assessment tax return by 31 January 2027 if, during the 2025/26 tax year, you:
- Were self-employed as a sole trader and earned more than £1,000
- Were a partner in a business partnership
However, Self-Assessment isn’t just for the self-employed. You may also need to complete a tax return if you’ve received income that hasn’t already been taxed, such as:
- Rental income from a property
- Tips, commission or other earnings outside your regular salary
- Interest, dividends or investment income held outside an ISA
Even if your untaxed income is relatively modest, don’t assume you’re off the hook. If it’s less than £2,500, you may not need to file a tax return, but you should still tell HMRC about it by calling 0300 200 3300.
You may also need to complete a tax return if you’ve made taxable capital gains above the annual Capital Gains Tax allowance, which is £3,000 for the 2025/26 tax year. Capital gains can arise when you sell, gift, exchange, or otherwise dispose of assets for more than you originally paid for them. Find out more in our guide What is Capital Gains Tax and how do I pay it?
If you’re unsure whether Self-Assessment applies to you, it’s worth checking sooner rather than later. Missing a filing deadline can lead to penalties, while getting organised early and getting all your paperwork ready can make the process much less stressful.
Find out more about self-assessment deadlines at HMRC.
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