Self-Assessment taxpayers must make advance payments towards their tax bills before midnight on July 31 to avoid incurring late payment interest charges, which are currently at a 16-year high of 7.75%.

Taxpayers who fall under Self-Assessment typically need to make two payments on account each year, except if their last tax bill was under £1,000 or if they paid more than 80% of the previous year’s tax owed through PAYE or other deductions at source.

Each payment is half of the previous year's tax bill, with due dates at midnight on January 31 during the tax year and July 31 following the end of the tax year.

If there remains an outstanding balance after these payments on account, a balancing payment is required by midnight on January 31 of the following year.

Elsa Littlewood, a private client tax partner at the accountancy and business advisory firm BDO, commented ahead of the deadline: “Summer can strain budgets due to holidays and childcare costs. However, those who miss the deadline or underpay should note that a 7.75% late payment interest rate will apply to any outstanding amounts after July 31. This can significantly increase your overall tax bill as debts to HMRC can escalate quickly.

“Those affected need to ensure they have the necessary funds and arrange the payment in time to reach HMRC before the deadline.

“If you anticipate a lower tax bill for 2023/24 compared to the previous year – for instance, if you have already completed your 2023/24 tax return – you can request HMRC to reduce your payments on account online.

“For those facing difficulties in making the payment, setting up a Time to Pay arrangement with HMRC is an option. For debts up to £30,000, this can be conveniently done online.

“It’s also important to remember that if your tax liability due on January 31, 2024, for the 2022/23 tax year, remains unpaid, a 5% penalty can be imposed for payments that are six months late. HMRC can also levy penalties for late tax return filings. To avoid these penalties, ensure any outstanding filings are completed promptly.

“Unfortunately, scammers often exploit this time of year, so it’s crucial to verify that you are making the payment to the correct HMRC account.”