TaxDigit

Author: Amir Rafiei

TaxDigit branded graphic - HMRC Timely Payments for Self Assessment, pay tax in-year via PAYE from April 2029

In the evolving landscape of UK personal taxation, few proposals carry the power to reshape a taxpayer’s cash flow as quietly — and as profoundly — as HMRC’s plan to collect Self Assessment liabilities sooner. On 23 June 2026, as part of its “Tax Update 2026” package, the Government opened a consultation on “timely payments” in Income Tax Self Assessment (ITSA). For the company directors, landlords and high-earning professionals we advise, it signals a meaningful shift in when, not just how much, tax falls due.

What is HMRC proposing?

At its heart, the proposal moves Self Assessment closer to payday. From April 2029, taxpayers who hold sufficient PAYE income alongside their Self Assessment sources would pay a forecast of their ITSA liability in-year, through PAYE, in each pay period — rather than waiting to settle the bill after the tax year ends. Someone paid monthly, for example, would pay their 2029/30 liability across twelve instalments, each equal to 8.3% of their forecast ITSA bill, with that forecast based on their 2028/29 return.

Crucially, these are payments on account, not a final reckoning. Taxpayers will still file a Self Assessment return, report their actual liability and reconcile through a balancing payment — or a repayment from HMRC — exactly as they do now. Forecasts can be updated where circumstances change.

Who will be affected?

HMRC estimates that of the roughly 12 million people within Self Assessment, around 7 million also receive PAYE income — and approximately 2.1 million of those are expected to have enough PAYE income to fall within the new in-year rules. The Government is separately consulting on whether other Self Assessment taxpayers, including the c. 2.5 million who currently make twice-yearly payments on account, should pay more frequently, potentially monthly or quarterly.

Directors and landlords: take note

If you draw a salary through your company and top up with dividends, or you run a property portfolio alongside employment, you sit squarely in HMRC’s sights. Spreading payments may ease the January cash-flow squeeze — but a forecast pitched too high could tie up working capital you would rather deploy elsewhere. Getting the forecast right becomes a planning discipline in its own right.

Why is this happening now?

The direction was first signalled at Budget 2025, and Tax Update 2026 fleshes out the detail. The Government’s stated aim is simplification, modernisation and fairness: smaller, regular payments, it argues, reduce tax debt and spare taxpayers the shock of large, infrequent bills. For well-advised clients, the headline is less about the principle and more about preparation — the time to model the cash-flow impact is now, well ahead of the 2029 start date.

How TaxDigit can help

As accountants in Surrey serving clients across the UK, our Guildford-based team helps directors, investors and business owners stay ahead of change rather than react to it. We can model how in-year payments would affect your cash position, keep your ITSA forecasts accurate so you never overpay, and integrate the new regime into a broader personal tax and tax advisory and planning strategy. You can also read HMRC’s full proposals in the official GOV.UK consultation.

Speak to a specialist

Change in the timing of tax is rarely as simple as it first appears. If you would like a clear, bespoke view of how HMRC’s timely-payments proposals could affect you or your business, our advisers are ready to help. Call TaxDigit on 01483 230 777, email info@taxdigit.co.uk, or visit our contact page to arrange a confidential consultation with our Guildford-based team.

TaxDigit — Making Tax Digital for Income Tax 2026, first quarterly deadline 7 August 2026

In the rapidly modernising landscape of UK taxation, few changes have reshaped the obligations of landlords and the self-employed as decisively as Making Tax Digital (MTD) for Income Tax. As of 6 April 2026 the regime is no longer a date on the horizon — it is live, it is mandatory, and the first quarterly filing deadline is almost upon us. At TaxDigit, accountants in Surrey serving clients across the UK, we are guiding property investors, company directors and business owners through this transition every day, and the message is clear: preparation now prevents penalties later.

Who must comply, and from when

From 6 April 2026, you fall within MTD for Income Tax if your qualifying income exceeded £50,000 in the 2024–25 tax year. Qualifying income is the figure that trips many people up: it is your gross income — turnover for sole traders and total rents received for landlords — before any expenses are deducted, not your profit. If you have both a trade and a property business, HMRC adds the two together to test the threshold.

The regime is being phased in. The £50,000 threshold applies from April 2026; it falls to £30,000 from April 2027, and to £20,000 from April 2028. In other words, even if you are outside the net today, many more landlords and sole traders will be drawn in over the next two years. You can confirm your own position using the official GOV.UK guidance on Making Tax Digital for Income Tax.

What actually changes

MTD replaces the single, once-a-year Self Assessment return with five touchpoints a year: four quarterly updates plus a year-end Final Declaration. You must keep your records digitally and submit through MTD-compatible software — spreadsheets alone, or paper records, will no longer satisfy HMRC.

The quarterly rhythm

The standard quarterly update deadlines are 7 August, 7 November, 7 February and 7 May. For the 2026–27 tax year that means your first quarterly update — covering 6 April to 5 July 2026 — is due by 7 August 2026. The Final Declaration, which confirms your full income position and replaces the traditional tax return, is due by 31 January following the tax year (31 January 2028 for 2026–27).

The new penalty regime

Alongside MTD, HMRC has introduced a points-based penalty system that works much like points on a driving licence. Each missed submission earns a point; reach the threshold — four points for those mandated into MTD — and a £200 penalty follows. HMRC has confirmed a soft-landing for late quarterly updates during the 2026–27 transitional year, but the Final Declaration is not protected, and late-payment penalties apply separately. The full rules are set out in the official guidance, and our Guildford-based team monitors them closely so that no client is caught out.

How TaxDigit helps you stay ahead

For busy landlords and owner-managers, the real cost of MTD is not the £200 penalty — it is the time, the software decisions and the risk of error spread across five filings instead of one. Our role is to remove that burden entirely. We help clients select and configure compliant software, establish clean digital bookkeeping from day one, and review every quarterly update before it reaches HMRC, so your figures are accurate and your deadlines are never missed.

Whether you need help with your personal tax position, ongoing bookkeeping that is MTD-ready, or strategic tax advisory and planning to structure your affairs efficiently, our chartered certified team delivers premium, plain-English advice tailored to your circumstances.

Act before 7 August

Making Tax Digital is the most significant change to personal tax compliance in a generation, and the first deadline is weeks away. If you are unsure whether you are caught, or you simply want the confidence of expert hands managing your filings, speak to TaxDigit today. Call our Guildford office on 01483 230 777, email info@taxdigit.co.uk, or visit our contact page to arrange a bespoke advisory consultation. As accountants in Surrey serving clients across the UK, we make digital tax simple.