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.
