With the 31 July 2026 deadline for making the second POA for 2025/26 fast approaching, ICAEW’s Tax Faculty is encouraging taxpayers to: 

• check if a POA is required, so that the deadline is not missed; and
• where a POA is required, to:
  • consider if it should be reduced, to ensure that tax is not overpaid; and
  • ensure that it is made by the due date, to avoid having to pay interest on any tax paid late. 

How to check if a POA is required 

Taxpayers within ITSA, including those who must comply with Making Tax Digital (MTD) for income tax, are required to pay their ITSA liability and any class 4 NIC due for 2025/26 as follows:  

• 31 January 2026: first POA; 
• 31 July 2026: second POA; and
• 31 January 2027: balancing payment (if required).  

However, the taxpayer does not need to make POA, and so must pay any tax and class 4 NIC due by 31 January 2027, where:  

• their total ITSA and class 4 NIC liability for 2024/25 was less than £1,000; or
• more than 80% of the income tax and NIC they owed for 2024/25 was deducted at source (eg, through pay as you earn). 

Taxpayers can check if they need to make a POA by 31 July 2026 – and if so, how much - on the HMRC app or in their online account.

Applying to reduce the POA 

In the first instance, each POA for 2025/26 is equal to 50% of the taxpayer’s income tax and class 4 NIC liability for 2024/25. The taxpayer can make a claim to reduce the amount of the POA where they expect that their total ITSA and class 4 NIC liability for 2025/26 will be less than that for 2024/25 (for example, because taxable income is lower).  

A claim can be made online or by post. Where the taxpayer has an agent, the agent can make the claim on their behalf. It should also be noted that, if the 2025/26 tax return is submitted in time for HMRC to process it before 31 July, HMRC will automatically update each POA before the 31 July payment falls due.   

Care should be taken to ensure that it is appropriate to make a claim. HMRC may charge a penalty where a taxpayer fraudulently or negligently makes an incorrect statement in a claim to reduce a payment on account. The maximum penalty is the difference between the payment that should have been made and the amount that was paid. 

Paying on time 

It is important that the POA is made by the due date of 31 July 2026 to avoid having to pay interest. The current rate of interest charged by HMRC on tax paid late is 7.75%.  

There are several ways in which payment can be made, as explained in HMRC’s guidance. In a recent press release, HMRC reminded taxpayers that “the HMRC app is the quickest way to pay” and warned taxpayers to be on alert for scams.  

Recent developments 

In June 2026, the government published a consultation document seeking views on its plans for ITSA taxpayers to pay tax earlier from April 2029. To find out more, including how to contribute to ICAEW’s response to the consultation, read our earlier article.