Is the second payment on account a separate tax?

No. It is an advance payment towards your next Self Assessment bill, not an extra charge. Each payment is usually half the tax you owed last year. When you file your next return, HMRC offsets what you have already paid against what you actually owe.

Why is my January bill so much bigger than the tax I owed?

Because it usually includes your first payment on account on top of your actual bill. In your first year that can mean paying around 150% of your tax in one go: the full year you owe, plus the first half of next year in advance. The 31 July payment is the second half.

Can I reduce my July payment if I am earning less this year?

Yes. If you expect to owe less, you can ask HMRC to reduce your payments on account online or with form SA303. Only do it if the drop is real, because reducing it too far means HMRC charges interest on the shortfall.

What if I cannot afford the 31 July payment?

Pay what you can and contact HMRC about a Time to Pay arrangement. A late payment on account does not get the 5% penalties a late return does, but interest runs from 1 August until it is cleared.

Does the payment include my Capital Gains Tax or student loan?

No. Payments on account cover Income Tax and Class 4 National Insurance only. Capital Gains Tax and student loan repayments are settled in your January balancing payment.

NOT financial advice - seek advice from a professional for your specific situation

TaxKilnUK tax guidance

The 31 July payment on account: why it feels like double tax, and why it isn't

By TaxKiln on 28 June 2026

Your second payment on account is due 31 July. It is an advance on next year's tax bill, not an extra tax, and the newly self-employed get caught out most.

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