For self-employed individuals and those under self-assessment, tax payments are made in two installments, known as payments on account. These advance tax payments help spread the cost of the year’s tax bill, reducing the risk of large, lump-sum payments in January.
The second payment on account for the 2024/25 tax year is due by 31 July 2025. This payment covers any outstanding tax owed for the previous tax year.
Individuals should review their earnings and tax liabilities to ensure they pay the correct amount, as overpayments may result in a tax refund, while underpayments could lead to interest charges.
To avoid cash flow disruptions, self-employed individuals should set aside funds in advance to cover tax payments and ensure timely submissions to HMRC.
If earnings have changed significantly, adjusting payments on account may be beneficial, and professional tax advice can help manage obligations efficiently.