Payments on Account Paid - What is Next? Planning for Your Autumn Tax Position

If you make payments on account towards your Self-Assessment bill, today - 31 July - is the deadline for your second instalment for the 2025/26 tax year, following the first payment made alongside your balancing payment back in January. With that payment now made, it's worth using the quieter months that typically follow to get genuinely ahead on your tax position, rather than letting the subject drop entirely until next January rolls around again.

Understanding Where You Actually Stand

With both payments on account for the year now made, it's worth taking stock of your position properly: based on your income so far this tax year, does the total you've now paid on account look broadly in line with what you're likely to actually owe, or is there a meaningful gap emerging in either direction? Getting a realistic sense of this now, several months before your return is due, gives you far more useful information than waiting until you're preparing the actual return to find out.

If You're Likely to Owe More Than Expected

If your income for the current year has grown compared with the previous year, on which your payments on account were based, it's worth recognising now that your eventual balancing payment next January is likely to be larger than your payments on account alone might suggest. Rather than being caught off guard by this in January, using the months between now and then to set aside additional funds specifically for the anticipated shortfall makes the eventual payment considerably less painful.

If Your Income Has Fallen

Conversely, if your income for the current year is turning out to be genuinely lower than expected, it may be worth reviewing whether your payments on account, calculated on last year's higher figure, are now over-collecting relative to your actual likely liability. While you've already made this July's payment, understanding this now is still useful groundwork for deciding whether next January's payments on account should be reduced, rather than simply accepting the same calculation again by default.

Using the Quieter Months for Genuine Tax Planning

The period between the July payment and the run-up to the following January's deadline tends to be the quietest point in the Self-Assessment calendar, which makes it an ideal window for more considered tax planning that's much harder to do properly under deadline pressure. This might include reviewing pension contributions, considering the timing of any planned asset disposals relative to your annual Capital Gains Tax exemption, or simply having a proper conversation about whether your current business structure remains the most tax-efficient one for your circumstances.

Starting Your Bookkeeping for the Year Now

Rather than waiting until the autumn or even later to begin organising your records for the current tax year, using these quieter summer weeks to keep your bookkeeping properly up to date pays dividends when it comes to preparing your return later in the year. A return prepared from clean, current records is both faster to complete and far less likely to contain errors than one reconstructed hastily from a backlog of unsorted paperwork.

A Good Moment to Review Your Business Structure Too

With the immediate deadline pressure behind you, late summer is also a sensible window to revisit broader questions that are easy to deprioritise during busier compliance periods - whether your business structure remains the most efficient one, whether your pension contributions are being made in the most tax-effective way, or whether any recent change in your circumstances warrants a fresh look at your overall financial plan. These conversations tend to be far more productive when there isn't an imminent deadline competing for attention.

Setting Yourself Up for an Easier January

Every year, the people who find January genuinely manageable are almost always the ones who used the preceding months productively, rather than letting tax matters drop out of view entirely between payments on account. Even a single proper check-in now, while the July payment is still fresh and there's no immediate deadline pressure, sets a considerably better foundation for the months ahead.

A Good Moment for a Proper Conversation

If you haven't had a substantive conversation about your tax position since your return was last filed, now, with both payments on account behind you and genuine breathing room before the next deadline cycle begins, is a good moment to have one. We're happy to review where things stand and help you plan properly for the rest of the year.