If you pay tax through Self Assessment, your second payment on account for the 2024/25 tax year is due on 31 July 2025.
This payment is based on last year's tax bill. If your profits fell in 2024/25, you may be paying more than you need to. You can ask HMRC to reduce it.
What payments on account are
Payments on account are advance payments towards your tax bill. They cover Income Tax and, if you are self-employed, Class 4 National Insurance.
There are two payments a year, due on 31 January and 31 July.
Each one is usually half of your previous year's Self Assessment bill.
Any tax still owed is paid as a balancing payment the following 31 January.
Payments on account do not include Capital Gains Tax, student loan repayments or Class 2 National Insurance. These are paid with the balancing payment.
When you don't need to make them
You don't need to make payments on account if either of these applies to the previous year:
your Self Assessment bill was less than £1,000, or
more than 80% of your tax was already paid another way, for example through PAYE on your wages or pension
When you can reduce them
You can ask to reduce your payments on account if you expect this year's bill to be lower than last year's. Common reasons are:
your profits have fallen
you have stopped trading
more of your tax is now paid through PAYE
you can claim more tax relief, for example on pension contributions
How to reduce them
File your 2024/25 tax return early. This is the simplest way. Once HMRC has your actual figures, your payments on account are recalculated automatically, and reduced if your actual bill is lower.
Or make a claim before you file. Sign in to your HMRC online account, choose your latest Self Assessment return, then "Reduce payments on account". You can also use form SA303 by post. You will need to say how much tax you expect to owe.
An example
James is self-employed. His 2023/24 Self Assessment bill was £8,000, so his payments on account for 2024/25 are £4,000 each. He paid the first one on 31 January 2025.
Work was quieter in 2024/25, and he now expects his bill to be about £5,000.
He claims to reduce each payment on account to £2,500.
He has already paid £4,000 in January, so £1,500 of that is now extra.
HMRC sets the £1,500 against July.
He pays £1,000 on 31 July 2025, instead of £4,000.
Don't reduce them too far
If you reduce your payments and your final bill turns out higher, HMRC charges interest on the shortfall from the original due dates. The late payment interest rate is currently 8.25%. A penalty is not automatic, but can apply if a claim to reduce is made fraudulently or negligently.
So base your claim on up-to-date figures. If you are not sure, it may be better to pay the full amount and get a refund later.
Summary
Your second payment on account for 2024/25 is due on 31 July 2025. If your profits have fallen, you can reduce it, either by filing your return early or by making a claim. Only reduce it to what you expect to owe.
If you would like us to work out your figures before 31 July, book a call or contact us.