Tax Planning
Planning for Fairer Tax Payments: How ‘Timely Payments’ in Self Assessment Will Impact You
Starting April 2029, many UK taxpayers with both PAYE income and Self Assessment obligations will shift part of their Self Assessment tax payment into their PAYE tax code—spreading out payments through the year to ease cashflow.
By NomadicTax Research Team • 5-8 min read • August 31, 2026
## What Are ‘Timely Payments’ Reforms?
“Timely Payments in Income Tax Self Assessment” is a reform announced as part of HMRC’s Tax Update 2026 package. From **4 April 2029**, those taxpayers who have both **Self Assessment income** (for example self-employment or rental) *and* **PAYE income** (employment or pension) will begin paying part of their SA-tax liability *via their PAYE code during the year*, rather than waiting until after the return deadline. ([gov.uk](https://www.gov.uk/government/publications/fiscal-events-2026-factsheets/timely-payments-in-income-tax-self-assessment-factsheet?utm_source=openai))
In addition, HMRC is consulting on reducing the burden for those who only have SA income through changes to **“Payments on Account”**—potentially shifting to smaller, more frequent instalments. No final decisions yet. ([gov.uk](https://www.gov.uk/government/publications/fiscal-events-2026-factsheets/timely-payments-in-income-tax-self-assessment-factsheet?utm_source=openai))
## Why This Matters
- **Cashflow smoother**: avoids large lump-sum payments, especially the second Self Assessment payment on accounts due in July after year end.
- **Reduced risk of tax debt and penalties**, since one in five SA bills are currently paid late. ([gov.uk](https://www.gov.uk/government/publications/fiscal-events-2026-factsheets/timely-payments-in-income-tax-self-assessment-factsheet?utm_source=openai))
## Who’s Affected
- Individuals with **PAYE income** *and* additional income subject to Self Assessment.
- Anyone making **Payments on Account** only (pure SA income) may see proposals affecting them, though these are still under consultation.
## Actions You Can Take Now
1. **Estimate your SA liability** using last year’s tax return, or updated tools when they’re released. This will help you understand how much PAYE code might adjust.
2. **Monitor HMRC consultations**, responding if your case is complex (e.g. variable income). Your input could shape fairness in the system.
3. **Check PAYE code notices** when received. They may be used to collect part of SA liability in-year.
## Example Scenarios
- *Jane*, full-time employed, also rents out a flat: from April 2029, part of her SA tax from rental will be collected gradually via PAYE, based on forecasts.
- *Mike*, a freelancer with no PAYE income: under current proposals, he continues to use Payments on Account—but smaller instalments could be introduced for all.
## Things to Watch
- Safeguards for those with **fluctuating income**: HMRC is seeking views on how to allow adjustments if your income changes drastically.
- How **forecasts** are calculated and what recourse taxpayers have if they believe the forecast overestimates.
- How changes will interact with **Making Tax Digital**, as the SA process becomes more frequent and software-based.
This reform underscores the UK government’s shift toward more regular, digital‐first tax administration. For many, it could mean calmer finances through the year. For some, especially with erratic income, engaging early with HMRC and advisors to anticipate adjustments will be key.