Compliance
Preparing for Timely Payments Reform in Self-Assessment
From April 2029 the UK government aims to shift tax payments for people with PAYE income into PAYE payroll, easing large lump sums—here’s how to prepare now.
By NomadicTax Research Team • 5-8 min read • September 5, 2026
## What’s changing?
The government has launched a consultation (23 June 2026) on reforms to Self-Assessment payment timings. For taxpayers who have PAYE income, from **April 2029** a portion of their Self-Assessment liability will be collected through **PAYE codes**, rather than via Payments on Account or large balancing payments.([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, the consultation explores whether other Self Assessment taxpayers—those without PAYE income—might move to more frequent payments as well, perhaps increasing the number or timing of Payments on Account.([gov.uk](https://www.gov.uk/government/publications/fiscal-events-2026-factsheets/timely-payments-in-income-tax-self-assessment-factsheet?utm_source=openai))
## Who will be impacted most?
- Individuals who have one or more employment/pension incomes alongside self-employment or property income. Someone working a part-time job but also renting out property or freelancing.
- PAYE-only taxpayers won’t be directly affected.
- Those with variable income might need more forecasting and budgeting as payments become more spread throughout the tax year.
## Steps to take now
- **Review your income streams**: Determine how much of your income comes via PAYE vs other sources. If you expect high non-PAYE income, consider making voluntary payments or topping up income estimates now.
- **Forecast Self-Assessment liabilities** in advance**: Use figures from recent years to estimate your tax liability and factor that into cashflow planning.
- **Stay updated**: Responses to the consultation are due autumn 2026 and further guidance will be issued. Keep an eye on HMRC updates.
- **Software and reporting**: Better digital systems will help—consider bookkeeping or accounting tools that integrate PAYE forecasting and managing PAYE code variations.
## Example Scenario
Tom is an IT consultant who does freelance work and is employed part time. His PAYE income is £30,000 a year; his freelance income is £20,000. Under reform, starting April 2029, HMRC may adjust his PAYE code mid-year so part of the tax on his freelance income is collected automatically via his employer. That’d reduce the need for large payments in January.
If Tom estimates his freelance income too high, he can inform HMRC to avoid overpayments; likewise if it's lower, adjust accordingly.
## Potential challenges & how to manage them
- **Forecasting in uncertainty**: For people with fluctuating non-PAYE income, forecasts may miss the mark—under or overpaying. Develop conservative estimates and update when earnings become clear.
- **Cashflow pressures early in the year**: Spreading tax over more of the year helps many, but those with uneven income may feel the pinch in earlier months; budgeting tools help.
- **System readiness**: Agents, payroll departments, and software providers will all be affected. Early adoption and testing will be key.
**Bottom line**: This upcoming reform is designed to reduce tax shocks and late payments. Align your finances, leverage digital tools, and stay tuned for definitive regulations to avoid surprises in 2029.