UK Tax Update – 31 July 2026: Self Assessment, Mayoral Revenues and PSC Rules

The UK tax update for 31 July 2026 is led by an immediate deadline: the second Self Assessment payment on account for 2025/26 must be paid by 11:59pm today. Business owners should also note the government’s new plan to share income-tax revenues with English mayors and an important Companies House clarification where a person with significant control (PSC) has died.

Below, SKN Chartered Accountants explains what has changed, who may be affected and the practical action to consider.

Self Assessment payment on account due on 31 July 2026

The second Self Assessment payment on account for the 2025/26 tax year is due by 11:59pm on Friday 31 July 2026. Payments on account are advance instalments towards the next Self Assessment bill, including Class 4 National Insurance where applicable.

Each instalment is normally half of the relevant tax owed for the previous year. HMRC’s payments-on-account guidance confirms that the two normal deadlines are 31 January and 31 July.

Who normally needs to make payments on account?

Payments on account are generally required unless either:

• the relevant tax owed for the previous year was less than £1,000; or
• more than 80% of the total tax liability was collected outside Self Assessment, for example through PAYE.

The amount due should appear in the taxpayer’s Self Assessment statement or online HMRC account. Check the figure rather than relying on an estimate or last year’s bank payment.

Can a payment on account be reduced?

A taxpayer can ask HMRC to reduce payments on account where the expected liability is genuinely lower. This may be appropriate where:

• business profits or property income have fallen;
• other taxable income has reduced;
• more tax will be deducted at source; or
• available tax relief has increased.

However, a reduction should be based on a reasonable calculation. If the payments are reduced too far and the final liability is higher, HMRC may charge interest on the shortfall. Current bookkeeping or management figures should therefore be reviewed before making a claim. See HMRC’s guidance on how to claim to reduce payments on account.

What if the full amount cannot be paid?

Do not ignore the liability. Confirm the amount due, pay as much as possible, retain proof of payment and contact HMRC promptly to discuss available support. Interest can continue to accrue on late amounts, so early action matters.

SKN’s Income Tax Self Assessment service can help clients check the amount due and assess whether a reduction is supportable.

English mayors to receive a share of income-tax revenues

On 30 July 2026, the government announced that English mayors will receive a share of income-tax revenues for the first time. It also said mayors will begin retaining a greater share of locally generated revenues from spring 2027, starting with business rates.

The stated aim is to let local areas retain more of the benefit created when employment, wages and business activity grow. The government expects this to support locally determined investment in areas such as transport, housing, regeneration, skills, employment support and public services.

Does this change PAYE or Income Tax rates now?

No immediate payroll change has been announced. The announcement concerns how nationally collected revenues may be allocated or retained. It does not instruct employers to alter PAYE calculations, employee tax codes or payroll software.

Important details — including the income-tax allocation method and the rules for business-rates retention — are still to come. The government says these will be set out in a fiscal-devolution roadmap at the Budget. Businesses should therefore treat this as a significant policy announcement, not as a completed change to their current tax compliance.

What could this mean for Birmingham and the West Midlands?

For Birmingham and the wider West Midlands, the longer-term effect could be a closer link between local economic growth and the funding available for regional transport, skills, housing and investment programmes.

Businesses operating in several mayoral regions may eventually see greater differences in local priorities, funding schemes and business support. For now, no change should be made to tax or payroll procedures. The practical step is to monitor the Budget roadmap and later implementation details.

Read the full government fiscal-devolution announcement.

Companies House clarifies PSC identity verification after death

Companies House updated its guidance on 30 July 2026 to address a difficult situation: what happens if a person with significant control dies before completing identity verification?

The updated guidance states that:

• identity verification does not need to be completed for a PSC who has died; and
• the deceased PSC should remain on the Companies House register until a grant of probate or letters of administration has been received.

This means a company should not remove a deceased PSC simply because identity verification cannot be completed. It must first establish the legal position concerning the shares or control rights.

Practical steps for the company

Depending on the circumstances, the company and its advisers may need to:

• review the register of members;
• check the articles of association and any shareholders’ agreement;
• obtain the grant of probate or letters of administration;
• confirm who legally inherits or controls the shares;
• update the company’s records and Companies House filings when the legal position is established; and
• consider separately whether the deceased person was also a company director.

A directorship and a shareholding are legally distinct. The death of a director can therefore require action separate from the treatment of the person’s shares and PSC status. Company-law or probate advice may also be needed.

See the updated Companies House guidance on when identity verification is required. SKN can assist with the accounting and company-record aspects through its Company Secretarial service.

Two specialist HMRC consultations close on 31 July 2026

UK-resident members of US LLCs

HMRC’s consultation on UK-resident individual members of US limited liability companies and other “reverse hybrid” entities closes on 31 July 2026. It considers how differences between UK and overseas entity classification can create unintended high effective tax rates and asks for views on possible legislative solutions.

This is most relevant to UK residents with US LLC interests, internationally mobile entrepreneurs and advisers dealing with foreign tax credits or cross-border entity classification. It is a consultation and does not itself change the current law. Read the US LLC consultation.

International Controlled Transactions Schedule

A separate consultation on a proposed annual International Controlled Transactions Schedule (ICTS) also closes on 31 July 2026. The proposed schedule would give HMRC structured information about cross-border related-party transactions and permanent-establishment dealings, supporting automated transfer-pricing risk assessment.

This proposal is mainly relevant to internationally connected businesses within the transfer-pricing or permanent-establishment rules, rather than most domestic SMEs. Read the ICTS consultation.

What should business owners do now?

1. Check Self Assessment today: confirm whether a second payment on account is due and arrange payment by 11:59pm.
2. Use current figures before reducing a payment: base any claim on reliable profit, income and relief estimates.
3. Do not change payroll: the mayoral revenue announcement does not require a PAYE or tax-code change.
4. Handle a deceased PSC carefully: do not make premature ownership or control changes before probate and the legal position are established.
5. Review cross-border exposure: seek specialist advice if you hold a US LLC interest or may fall within international transfer-pricing reporting.

Frequently asked questions

What is due on 31 July 2026 for Self Assessment?

The second payment on account for the 2025/26 tax year is normally due by 11:59pm on 31 July 2026. The exact amount should be checked through the taxpayer’s HMRC account or statement.

Can I reduce my July payment on account?

Potentially, if the expected tax liability is genuinely lower. The reduction should be supported by a reasonable estimate because interest may arise if the final liability is higher.

Will the mayoral income-tax announcement change my PAYE?

No immediate PAYE change has been announced. Employers should continue to operate payroll under the existing national rules unless later legislation or HMRC guidance says otherwise.

Does a deceased PSC have to verify their identity?

No. Companies House says a PSC who has died does not need to complete identity verification and should remain on the register until a grant of probate or letters of administration has been received.

Do the consultations closing on 31 July change the law?

No. Consultations gather evidence and views before the government finalises policy or legislation. Existing rules continue to apply unless and until a change is enacted and brought into force.

Official sources

• HMRC — Payments on account
• Prime Minister’s Office — Mayors to receive a share of income-tax revenues
• Companies House — When identity verification is required
• HMRC — UK-resident members of US LLCs consultation
• HMRC — International Controlled Transactions Schedule consultation

Last reviewed: 31 July 2026.

Disclaimer: This article provides general information only and does not constitute tax, legal, probate or financial advice. Announced policies and consultation proposals may change. Professional advice should be obtained before reducing a tax payment, changing a company’s PSC record or restructuring a cross-border arrangement.