HMRC has opened a consultation that could move some Self Assessment tax payments into the year you earn the income, rather than months later. The consultation, called Timely Payments in Income Tax Self Assessment, was published on 23 June 2026 and closes on 4 August 2026. The first proposed changes would start from April 2029.
This is not a tax rise. HMRC says the total tax due would stay the same, but the timing would change. Instead of waiting for large January and July bills, some taxpayers would pay smaller amounts during the year. The idea was first announced at Budget 2025 and sits alongside Making Tax Digital for Income Tax, which became mandatory from 6 April 2026 for sole traders and landlords with qualifying income over £50,000.
Around 12 million people file a Self Assessment return each year, so this matters to a wide group of taxpayers.
Who this affects
HMRC is looking at 2 broad groups.
The first is people who file a Self Assessment return and also have PAYE income, such as employment or pension income. This could include a salaried employee with rental profit, dividends or a side business. From April 2029, this group may pay more of their forecast Self Assessment bill through their PAYE tax code each payday. HMRC says around 7 million Self Assessment taxpayers have PAYE income, although around 2.1 million are currently expected to have enough PAYE income to fall within the first proposals.
The second group is people whose Self Assessment income is not taxed at source, including many sole traders, partners and landlords. HMRC is exploring more frequent direct Payments on Account for them, possibly monthly or quarterly, instead of the current 2 instalments. If you work through CIS as a subcontractor, your position will depend on how much tax is already deducted at source.
How it compares to now
| Area | How it works now | What is being proposed |
|---|---|---|
| When you pay | A balancing payment on 31 January, plus Payments on Account on 31 January and 31 July where they apply | More regular payments during the year, either through PAYE or direct instalments |
| How payments are worked out | Each Payment on Account is normally half of last year’s relevant bill | A forecast based on your latest return, with updates if income changes |
| Start date | Current rules still apply | PAYE-linked changes proposed from April 2029 |
| Total tax due | Based on your actual liability | The same overall, but paid earlier |
The pressure point is timing. Today, you might pay one large amount in January, another in July, then settle the balance the following January. Spreading that across the year changes how you manage cash flow, especially if your income is seasonal or uneven.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
A worked example
Say you are a freelance designer earning £45,000, employed part time and letting a flat. Under the proposals, HMRC could use your last tax return to forecast your Self Assessment bill and collect some of it through your PAYE tax code. If your freelance work drops, you should be able to update the forecast so you do not overpay during the year.
That flexibility only works if your records are current, which is where accounting for sole traders and clean bookkeeping earn their place.
The wider risk is getting the estimate wrong. HMRC says around 1 in 5 Self Assessment tax bills are paid late. Moving to smaller, regular payments is meant to reduce that risk, but it also means tax leaves your account earlier.
What you can do now
Nothing is law yet, so there is no need to panic. A few sensible steps help. Keep your bookkeeping up to date so any forecast reflects reality. Avoid the common mistakes people make when they first move to digital reporting. Set money aside as you earn, and file early so you understand your bill in good time and avoid penalties for filing late.
If you employ people, this also touches PAYE, so tidy payroll support and an eye on your National Insurance position both help. If your turnover is climbing towards the VAT threshold, a good VAT accountant keeps both sides aligned.
You can respond directly to the HMRC consultation before 4 August 2026 if you want a say. Clients across Slough and our Reading accountants office often want a plan mapped out well ahead of 2029.
Frequently asked questions
Is Self Assessment changing to monthly payments?
Not yet. It is a consultation, with PAYE-linked changes proposed from April 2029.
Do I have to pay tax in advance right now?
Only under the existing Payments on Account rules, which usually apply when your bill is over £1,000 and less than 80% was taxed at source.
Will I pay more tax under the new system?
No. HMRC’s position is that the total tax due will be unchanged. You would simply pay it earlier and more evenly.
When does the consultation close?
It closes on 4 August 2026, with a government response expected in Autumn 2026.
Get a head start
You have time, but a clear plan beats a last-minute scramble. Speak to the accountants in Slough at Asmat & Co and we will help you get your records and cash flow ready for whatever the final rules look like. Book a chat today.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
