Why HMRC wants money again on 31 July (and why it isn't a second tax bill)
By InkKiln ·
HMRC asks for more tax on 31 July. It is not a second bill, it is a payment on account toward next year. Who pays it, who can reduce it, and how to handle it.
You had a good first year in the chair, paid your tax in January, and thought you were square with HMRC until your next return. Then a demand lands for 31 July. It is not a mistake and it is not a second tax bill. It is your second payment on account, an advance toward next year's tax, and for most full-time tattoo artists it is due by midnight on 31 July 2026.
The short version
- The 31 July payment is a payment on account: an advance instalment toward your next Self Assessment bill, not an extra tax stacked on January's.
- You pay it in two halves, 31 January and 31 July, and each half is half of last year's tax bill.
- You have to make payments on account unless your last bill was under £1,000, or you paid more than 80% of your tax at source (for example through PAYE on an employed job).
- If this year is quieter than last, you can ask HMRC to reduce the payments, but cut them too far and HMRC charges interest on the shortfall.
- Miss the deadline and late payment interest starts the next day. It is currently 7.75%.
What the 31 July payment actually is
It is an advance payment toward your next tax bill, not a separate charge. HMRC takes the tax you owed last year, assumes you will earn roughly the same again, and asks you to pay it in two instalments instead of one lump. Half is due by 31 January, half by 31 July, and each half is 50% of last year's bill.
So the payment due on 31 July 2026 is the second instalment toward your 2025/26 tax. When you file that return, HMRC works out what you actually owed and you settle the difference, up or down. Nothing is charged twice. How the figure is worked out in detail sits in our payments on account guide.
Why it feels like you are being taxed twice
Because of the order it lands in. In your first profitable year the January bill is brutal: you pay the full tax for the year just gone, plus the first half of next year's tax in advance, in one go. Then the second half turns up in July.
Nobody warns you about this when you start taking bookings. One strong year on the chair and the system quietly pulls a year and a half of tax out of you across two dates. It is not a penalty. It is Self Assessment trying to stop you facing one giant bill every January. It just does not feel like a favour the first time it happens.
Who actually has to pay it
You make payments on account unless one of two things is true. Your last Self Assessment bill was under £1,000. Or you paid more than 80% of last year's tax at source, for example through PAYE on an employed job you hold alongside the studio.
For most full-time artists, neither gets you off. If the chair is your main income and your bill cleared £1,000, payments on account apply to you. Booth renters and studio owners included.
Your income dropped this year. Can you pay less?
Yes, but carefully. If you know this year will be leaner, a long quiet spell, time off, a guest spot that fell through, you can ask HMRC to reduce your payments on account through your online account or with form SA303.
Here is the judgement call. If you cut the payments and then earn more than you guessed, HMRC charges interest on the shortfall. So reduce them when the work has genuinely dried up. Do not reduce them just to sit on the cash for a few months, because that gamble has a price. If the real problem is that you never set the money aside, our guides on allowable expenses and record keeping are where you fix that for next year.
What happens if you miss 31 July
Interest starts the day after. HMRC adds late payment interest, currently 7.75%, set at the Bank of England base rate plus 4 percentage points. That rate has climbed in recent years, so paying late costs more than it used to.
If money is genuinely tight, do not go silent. You can arrange to spread what you owe, but you sort it before the deadline, not after. HMRC is far easier to deal with on 20 July than on 20 August.
Common questions
Is the 31 July payment a second tax bill?
No. It is the second instalment of an advance toward next year's tax, not a new charge. Each instalment is half of last year's bill, and the whole thing is reconciled against what you actually owe when you file your return.
What if I do not make payments on account?
You only have to make them if your last bill was £1,000 or more and you paid less than 80% of your tax at source. If you are full-time self-employed on the chair, you almost certainly do. Skipping a payment you genuinely owe triggers interest from the day after the deadline.
Can I reduce my July payment?
Yes, through your online Self Assessment account or form SA303, if you expect this year's tax to be lower than last year's. Reduce it too far and HMRC charges interest on the difference once your real bill is known.
How much is the late payment interest?
It is currently 7.75%, set at the Bank of England base rate plus 4 percentage points. The rate moves with the base rate, so check the live figure if you are going to be late.
Does the July payment cover my National Insurance too?
Payments on account are based on your previous Self Assessment bill, which can include Class 4 National Insurance as well as Income Tax. The full breakdown is in our Self Assessment guide.
The bottom line
The 31 July payment is not a second tax bill and not a mistake. It is next year's tax pulled forward, and the only people it truly catches out are the ones who did not know it was coming. Put the date in your calendar now, set money aside through the year, and it stops being a shock. For how payments on account are calculated, how to reduce them, and how the whole return fits together, read our cornerstone guide: Self Assessment for tattoo artists.