Understanding the 31st July Deadline for Paying Income Tax and National Insurance

CREATED BY ROGER EDDOWES Published: 07/07/2025 @ 09:00AM #SelfEmployedTaxTips #IncomeTaxDeadlines #MinimisingTaxLiabilities #PaymentsOnAccount #TaxRequirements

Although the 31st January is the usual date for paying Income Tax and National Insurance contributions in full, for many self-assessment taxpayers, the 31st July is another vital date to remember for those who need to make a Payment on Account ...

Deadline looming near, Taxes and NIC to be paid, Wallet feeling light

As the 31st July deadline approaches, self-employed taxpayers must take proactive steps to ensure they meet their obligations under the self-assessment (SA) system. The importance of this specific date is underscored by the requirement for some taxpayers to make a second payment on account (POA).

This POA is based on their prior year's income tax
and Class 4 National Insurance contributions!

Taxpayers should first ascertain whether they are required to make a POA by reviewing their 2023/24 self-assessment tax return. If they have submitted their return, they can easily access their online account or self-assessment statement, which will indicate their POA obligations.

The necessity to comply with the 31st July deadline for paying income tax and NIC stems from the fact that each POA equals 50% of the taxpayer's total SA liability from the previous tax year. Therefore, any discrepancies in income or tax liability for the current year become crucial.

In the lead-up to the deadline, it is prudent for taxpayers to evaluate whether they can make a claim to reduce their Payment on Account. For individuals anticipating lower income or other changes in their financial situation, this option may reduce the amount they owe.

For example, a self-employed individual who paid a total of £6,504 in the previous year might estimate their liability for the current year at £5,052. By making a claim to reduce their payments to £2,526, they can ease their financial burden and adjust their expenses to their current capacity.

Taxpayers must also consider the consequences of failing to comply with the July 31st deadline. HMRC charges interest on late payments, currently set at 8.25%. Taxpayers can incur penalties if they submit incorrect claims, making it imperative to ensure accuracy and compliance. Should a claim to reduce the POA be excessive, interest will be charged on the underpayment. Any overpaid taxes will be refunded with interest at a rate of 3.25%.

Given the current economic climate, where fiscal drag has led to more taxpayers being liable for making payments on account, the importance of paying the correct amount at the right time cannot be overstated. The latest figures from the Office for National Statistics reflect a significant increase in self-assessment tax receipts, heightening the need for preparation and adherence to HMRC's compliance standards.

The 31st July deadline for paying income tax and NIC
needs careful planning and consideration!

By understanding payment obligations, assessing eligibility for claims, and adhering to best practices, taxpayers can navigate their responsibilities with greater ease and confidence. Awareness of these elements is essential to foster an informed taxpayer community.

As always, the Business Godparent stands ready to help you.

Until next time ...

ROGER EDDOWES
Join our mailing list! Click here and be one of the first to know when we publish a new blog post!

Share the blog love ...

Buffer Facebook Twitter Linkedin Pinterest WhatsApp #SelfEmployedTaxTips #IncomeTaxDeadlines #MinimisingTaxLiabilities #PaymentsOnAccount #TaxRequirements

About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach. Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

More blog posts for you to enjoy ...
		Evidence Needed For Every Pension Tax Relief Claim From September 2025 As of 1st of September 2025, every Pension Tax Relief claim now needs evidence and can't be made by phone. Claims must be made online or by post, with self-assessment via the return. Here's what to provide and who can claim, ...
		The Massive Problem With 'Good In Theory' Tax Planning In today's blog post, I'll discuss why tax planning should be boring. Innovative tax strategies can backfire, and policy tweaks often hinder growth and savings. Practical, predictable rules will always beat flashy headlines ....
		HMRC Targets Personal Expenditure In Business Accounts This Tax Year HMRC will be targeting personal expenditure in business accounts with a new digital campaign and will make more enquiries. It wants clear, consistent apportionment and strong records. You should review your accounts before su...
		Disputed Employer PAYE Charges: Correct Your HMRC Tax Bill Did you know it's possible to challenge employer PAYE charges, identify payroll mismatches, and correct your HMRC tax bill? My blog post outlines what information to gather and how HMRC will respond to your dispute ......
		What's Changing For Employee Car Ownership Schemes And Company Vehicle Tax? HMRC is tightening the rules for employee car ownership schemes from October 2026. It also remains crucial to classify vehicles correctly for tax. This blog post explains both changes and what to do next ......
		Final Coins Featuring The Late Queen Enter Circulation As New Carolean Era Begins The final £1 coins featuring our beloved late Queen enter circulation as new King Charles III designs grow in number. Millions are heading for tills, pockets and collections. It's a tangible moment of change in Britain's ever...
		Employment Rights Bill Roadmap: SSP Changes From April 2026 The Employment Rights Bill roadmap confirms SSP reform from April 2026. If you're an employer, then take a look to see if your policies, budgets and systems align with the new rules. Wider measures will follow through 2026 an...
		How To Avoid Tax Return Errors Due To Mid-Year CGT Changes Mid-year rate rises have led to tax return errors due to Capital Gains Tax changes. Understand who is affected, what HMRC letters mean, and how to correct returns. Use HMRC's tool and amend your returns promptly to avoid inte...

Other bloggers you may like ...
		When My Colleague (AKA ChatGPT) Isn't Enough: Reflections After A Tragedy Posted by Steffi Lewis on https://www.steffilewis.com I read on BBC News recently about the heartbreaking case of 16-year-old Adam Raine from California, who took his own life. His parents allege that ove ...
		Your Ideal Temporary Accommodation During Renovations In Milton Keynes Posted by Emily Freeman on https://blog.shortstay-mk.co.uk If you're just about to start renovating your home, then wouldn't it be far easier if you moved out? All that dust, noise, and lack of privacy with bu ...
		Eight Ways To Help You Create Career Opportunities In Times Of Uncertainty Posted by Dave Cordle on https://blog.davecordle.co.uk Here's how to create career opportunities in times of uncertainty with clarity and smart action. Define what you want, map your skills to value, and u ...
		Understanding The 10-Year Charge On Trusts Without The Headaches Posted by Helen Beaumont on https://blog.essendontax.co.uk The 10-Year charge on trusts can be a confusing subject for many, so here's a clear, friendly guide in blog post form. Learn what it is, how it's calc ...