Compliance
Planning for More Timely Payments: What UK Self Assessment Taxpayers Should Know
A UK consultation proposes requiring more in-year payments and changing Payments on Account for Self Assessment—critical for planning cash flow and avoiding surprises.
By NomadicTax Research Team • 5-8 min read • July 7, 2026
## What’s in the Proposal?
As part of **Tax Update 2026: simplification, modernisation and fairness**, HMRC has published a **consultation** seeking views on implementing **more timely payments** in the **Income Tax Self Assessment (ITSA)** system. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai)) This involves:
- Requiring taxpayers with both PAYE and Self Assessment income to pay more of their forecasted Self Assessment liability **through PAYE** starting **April 2029**. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai))
- Reforms for other Self Assessment taxpayers via changes to **Payments on Account**, spreading tax bills into smaller, more regular payments. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai))
## Why This Matters for Tax Planning
Spreading payments helps avoid large, unexpected bills—especially for those with fluctuating income. For those who are used to lump-sum payments twice a year, this will affect cash flow planning and budgeting. Employers and agents will also need to adjust systems to accommodate PAYE deductions increasing as a result.
## Who Is Likely to Be Affected?
- Individuals who have mixed income sources—PAYE + self-employment, investment, or rental income.
- Those currently making Payments on Account and expecting large tax bills at end of year.
- Advisors helping clients with irregular income patterns.
## Practical Tips to Prepare
- **Estimate your forecasted income and tax liability now**, with sensitivity to upside/downside.
- **Monitor PAYE codes** adjustments—ensure your employer deductions reflect new responsibilities ahead of April 2029.
- **Update bookkeeping and cash reserves** so that regular smaller payments are manageable.
- **Speak to your agent or HMRC** if uncertainties exist—consultation responses will shape how the rules apply.
## Example Illustration
- John is self-employed with additional rental income. Under current system, he pays twice per year via Payments on Account. Under proposed changes, he’ll begin directing more of his Self Assessment tax liability through WEEKLY PAYE or PAYE adjustments starting April 2029. His cash flow will need smoothing—setting aside monthly reserves can help.
## What’s Next & Key Dates
- Consultation currently open: responses will shape final rules. ([gov.uk](https://www.gov.uk/government/collections/taxupdate-2026-simplification-modernisation-and-fairness?utm_source=openai))
- Implementation planned for April 2029 for mixed income individuals; broader reforms to Payments on Account follow. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary?utm_source=openai))
- Watch Finance Bill announcements in 2026-27 for legislative detail.
**Take-away:** If you expect more frequent or larger tax liabilities via Self Assessment, this change may affect you significantly. Begin planning now—review forecast income, adjust cash reserves, and consult proactively to avoid surprises when rules take effect in 2029.