Self-Assessment Tax Return: Missed your second payment?

What is the ‘second payment on account’ for Self-Assessment, and when is it due?  

In certain situations, you must make 'payments on account'. This means making advance payments for your self-assessment tax by 31st January and 31st July. Each payment is half of the previous year's tax bill, with any extra tax due then being classed as a 'balancing payment' to be paid the following January.  

What happens if I miss the 31st July deadline for the second payment?  

If you miss the 31st July deadline, HMRC will begin charging interest on the outstanding amount from 1st August. The current interest rate on late tax payments is set at the Bank of England base rate + 4%, which is 8.25% (as of July 2025).  

If your 31st July payment on account remains late after 30 days, HMRC will charge a penalty of 5% of the unpaid tax. If it remains late after six months and 12 months, HMRC can charge further penalties of 5% of the unpaid tax on each of those dates. 

If I can’t afford to pay right now, what should I do?  

If you can’t afford to pay right now, we recommend that you contact HMRC as soon as possible. HMRC offers Time to Pay arrangements that allow you to spread the cost in monthly instalments. These are generally accessible online via your Government Gateway account if the debt is under £30,000, are less than 60 days late paying, and you’re up to date with your tax returns. Acting early shows willingness to comply and prevents interest building up and escalation. 

Will missing the second payment on account affect my future tax return or payments?  

Yes, missing the second payment on account will potentially affect your future tax return or payments. If you haven’t paid the second payment on account, it will still be owed when you file your next self-assessment tax return, and you will have penalties and interest payments building up. If your actual tax bill is higher than estimated, you may owe even more. This can place a significant burden on your cash flow next January.  

How can I plan better next year? 

It may be too late to action these tips this year, but they will be helpful to avoid missing a payment on account next year. 

Will preparing my tax return sooner help me? 

Yes, preparing your tax return as soon as possible after the end of the tax year could help you as the amount to pay on 31st July is based on your previous self-assessment tax return.  

If your taxable income has reduced, or you have made other tax savings, your 31st July payment on account would be recalculated and you may have less to pay to HMRC than you expect.  

Can I reduce my payments on account? 

If you are unable to submit your tax return immediately but you have reasons to expect your tax liability will be lower than the previous year, you can make a claim to reduce your payments on account. Please note that if your payments are reduced below your actual liability, HMRC will charge interest on the underpayment.  

Last updated 31 Jul 2025 | First published 15 Oct 2021

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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