The government is considering significant changes to the timing of tax payments for Income Tax through Self-Assessment, with proposals that could bring payments much closer to the point at which income is earned set to impact millions of taxpayers. While more frequent payments may help some taxpayers manage their liabilities, the reforms could also create additional costs, administrative pressures and cash-flow challenges, particularly for those with seasonal or fluctuating income.
Our Private Client team explain the proposed reforms and what this means for taxpayers.
What changes have been proposed in the Timely Payments in Income Tax Self-Assessment proposal?
The consultation on Timely Payments in Income Tax Self-Assessment, which closed on 4th August 2026, explored how the timing of tax payments could be altered to bring forward the payment date for taxpayers
Currently, tax paid through self-assessment is payable by 31st January following the end of each tax year. Some taxpayers must also make payments on account each January and July in advance of this payment date. The proposals outlined in the consultation confirmed plans for certain taxpayers with sufficient PAYE income to make payments towards their forecast Self-Assessment liability through PAYE from April 2029. The government also sought views on whether other Self-Assessment taxpayers should make payments on account more frequently throughout the year.
How would more frequent tax payments work?
Under the proposals, payments would be calculated using information from a taxpayer’s most recently submitted Self-Assessment return. Taxpayers would be able to update the forecast if their circumstances changed, with any difference settled through the usual balancing payment or repayment process after the return was completed. The proposals would not increase the overall amount of tax due, but they could bring forward when it must be paid.
What concerns have been raised about the proposal?
Although more frequent payments may help some taxpayers budget for their liabilities, the proposals raise practical concerns. Taxpayers with seasonal, irregular or fluctuating income could be asked to pay tax before receiving the income on which it is based. Changes to income or forecasts could also lead to taxpayers moving between different payment methods, increasing the risk of confusion, additional administration and underpayments or overpayments.
Additional pressure for employers and advisors
The reforms could also create further work for businesses, employers and advisors. HMRC acknowledges that employers and payroll providers may need to process more tax code changes and respond to questions from employees whose take-home pay is affected. The changes would also come during the wider transition to Making Tax Digital for Income Tax which will already be increasing administration for taxpayers and their advisors.
Representing client concerns in the consultation
Through the work of our Rural Business and Private Client Partner, Catherine Desmond, on the Country Land and Business Association’s Tax Committee, PKF Smith Cooper has contributed to the consultation process and helped communicate the practical issues that matter to our clients. Our feedback has reflected concerns about the potential cost, administrative burden and cash-flow implications of bringing Self-Assessment payments closer to real time.
What happens next?
The government is expected to publish its response to concerns surrounding the Timely Payments in Income Tax Self-Assessment proposal in Autumn 2026. Any relevant legislation would be introduced through a future Finance Bill ahead of the planned April 2029 implementation date. Our specialist team will continue to monitor developments and explain what any confirmed changes could mean for you and your business.
If you are concerned about how the proposal could affect your tax payments or cash flow, please contact a member of our Private Client team.
