Self Assessment Tax Payment Changes from April 2029: What You Need to Know

For many Self Assessment taxpayers, the way tax is paid could look very different from April 2029.

The government has announced plans to bring some Self Assessment tax payments closer to the time income is earned. For taxpayers who also receive income through PAYE, this could mean paying more of their Self Assessment liability through their salary or pension rather than waiting for the usual Self Assessment payment dates.

The proposals have raised questions about whether Making Tax Digital (MTD) will eventually lead to more frequent tax payments. However, it is important to understand that MTD quarterly reporting and the proposed changes to tax payment timings are separate measures.

Why is HMRC looking at changing Self Assessment payments?

Under the current system, Self Assessment taxpayers can sometimes pay tax many months after the income was received.

HMRC believes that bringing tax payments closer to the time income is earned could make payments easier to manage and reduce the risk of taxpayers building up large tax bills or falling into tax debt.

According to HMRC, around one in five Self Assessment tax bills are paid late. The government therefore believes that spreading payments more evenly could improve cash-flow planning for taxpayers while reducing the amount of overdue tax that HMRC needs to collect.

What was announced in Budget 2025?

At Budget 2025, the government announced that Self Assessment taxpayers with PAYE income will be required to pay more of their Self Assessment tax liability during the year through PAYE from April 2029.

The government has also been considering whether similar changes should eventually apply to taxpayers who have Self Assessment income but do not have enough PAYE income to collect their tax through payroll.

This does not mean taxpayers will pay more tax overall. Instead, the main change is expected to be when the tax is collected.

How could the new system work?

Under the proposed approach, HMRC would use a taxpayer’s most recent Self Assessment tax return to estimate their upcoming tax liability.

Where the taxpayer has sufficient PAYE income, the Self Assessment liability could then be collected through their PAYE income throughout the year.

In practical terms, this could mean smaller and more regular deductions instead of relying on larger payments at the existing Self Assessment deadlines.

For taxpayers with relatively stable income, this could make tax payments more predictable and easier to budget for.

What if your income changes?

Not everyone has a predictable income.

Self-employed individuals, contractors and business owners may experience significant changes in income during the year. Seasonal businesses can also have periods where income is much higher or lower than normal.

HMRC has recognised this issue. Under the proposals, taxpayers whose income changes significantly could be able to update their forecast so that their tax payments better reflect their expected liability.

This is particularly important for taxpayers who could otherwise end up paying tax before receiving the income on which that tax is based.

What happens during the transition year?

The move to the new system could create a challenging transition period.

For example, a taxpayer may still have an existing Self Assessment liability to settle while also beginning to make payments towards their new year’s estimated tax liability.

The government is therefore considering different ways of managing this transition, including options that could allow some liabilities to be spread over a longer period.

The aim would be to avoid taxpayers facing an unusually large tax bill simply because the payment system is changing.

What if you do not have enough PAYE income?

Not every Self Assessment taxpayer will have sufficient PAYE income for their tax liability to be collected through payroll.

The government is therefore also considering whether Payments on Account should become more frequent for other Self Assessment taxpayers.

Potential approaches include spreading payments across the year through monthly or quarterly instalments, followed by a final adjustment once the Self Assessment tax return has been submitted.

However, these changes are still subject to policy development and consultation.

Is this the same as quarterly Making Tax Digital payments?

No.

This is one of the most important points for taxpayers to understand.

Making Tax Digital is primarily designed to improve digital record-keeping, reporting and visibility of income and expenses. The proposed 2029 reforms concern the timing of Self Assessment tax payments.

Although the two measures are related to HMRC’s wider aim of moving tax administration closer to real time, quarterly MTD updates do not automatically mean taxpayers will have to make quarterly tax payments.

The government is separately consulting on how more timely Self Assessment payments could work.

What could this mean for your cash flow?

The biggest practical consideration for many taxpayers will be cash flow.

Under the current system, taxpayers may have time to set aside money before their Self Assessment bill becomes due. If tax is collected more frequently, less money may remain available in the business or household during the year.

On the other hand, spreading payments could make tax bills easier to budget for and reduce the shock of a large January payment.

The impact will depend on your income, whether you have PAYE earnings, how predictable your income is and how much tax you normally pay.

What should Self Assessment taxpayers do now?

There is no need to change your payment arrangements immediately based solely on these proposals.

However, taxpayers should start thinking about how changes to payment timings could affect their cash flow.

It is sensible to:

• Keep accurate and up-to-date digital records.
• Review your expected income and expenses regularly.
• Set aside money for your tax liability.
• Understand how Payments on Account currently work.
• Consider how a change in payment frequency could affect your business cash flow.
• Take professional advice if you have both PAYE and self-employed income.

Planning ahead will be particularly important for businesses with seasonal or fluctuating income.

When will we know more?

HMRC published its Timely Payments in Income Tax Self Assessment consultation on 23 June 2026. The consultation considered how the April 2029 changes could work for taxpayers with PAYE income and also explored the possibility of more regular payments for other Self Assessment taxpayers.

The consultation closed on 4 August 2026, with the government expected to publish its response in autumn 2026. Further legislation and guidance will be needed before the reforms take effect.

What does this mean for you?

The proposed Self Assessment payment changes from April 2029 could significantly alter the timing of tax payments for some individuals.

Taxpayers with PAYE income may have more of their Self Assessment liability collected through PAYE during the year, while other taxpayers could eventually be offered more frequent payment arrangements.

However, these proposals should not be confused with MTD quarterly reporting. The two measures address different aspects of the tax system.

For individuals and business owners, the key consideration will be the potential impact on cash flow, budgeting and tax planning.

Keeping your financial records up to date and regularly reviewing your expected tax position can help you prepare for any changes ahead.

If you are unsure how the proposed 2029 changes could affect your tax position, speak to a professional adviser before making any changes to your current payment arrangements

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