John Healey's 2026 Autumn Budget announced a new payment regime for Self-Assessment taxpayers, with more regular payments to be introduced from April 2029.

These changes will affect the timing of when tax is paid, rather than the amount of tax due, with more regular payments being made by taxpayers during the tax year in which they earn the income.

The change will impact those who make payments on account via Self-Assessment. This commonly includes self-employed individuals, partners and others with material untaxed income (e.g. landlords) where more than £1,000 of tax is payable through Self-Assessment.

The Government believes the changes could help some taxpayers spread the cost of their tax liabilities, assisting with better cash flow management and reducing the build-up of tax debt. However, paying tax sooner will reduce the period for which some taxpayers can retain and use those funds, and the transition in 2029/30 may create additional cash-flow pressure.

How does the current Self-Assessment system work?

Within the current system, most taxpayers are required to make two payments on account, which are advance payments towards the current year’s Self-Assessment liability. These are calculated as half of the previous year’s income tax liability. The first payment is due on 31 January, ten months into the tax year it relates to, with the second due on 31 July, four months after the end of the tax year it relates to.

Once the tax return is completed, the actual liability is reduced by the payments on account already made. Any remaining amount is paid as a balancing payment, due by 31 January following the end of the tax year. If the payments on accounts exceed the final liability, the excess may be repaid or set against payments on account for the current tax year.

What will change from April 2029?

From April 2029, taxpayers within the payments on account regime will be required to make smaller, more regular payments during the year in which they earn the income. These payments will be automated, for example by Direct Debit, representing a change from the current system in which taxpayers generally arrange each payment themselves.

‘Regular’ is not yet defined. Given payments are currently made twice a year already, it appears that the new rules will bring in a requirement to make quarterly payments, at the very least.

The advanced payments will continue to be calculated based on the previous year’s income tax liability, though there will be a mechanism for the payments to be reduced where appropriate (e.g. a drop in profits). A greater number of estimated payments increases the risk that payments will be set too low, leading to higher late payment interest for taxpayers

There will be a transition period from April 2029, where it appears taxpayers may be required to make their regular payment on account for 2028/29, whilst also beginning to make regular payments under the new Self-Assessment payment regime for 2029/30. This transition period could be particularly difficult for taxpayers from a cashflow perspective.

For those with Self-Assessment liabilities that also pay tax through PAYE (e.g. employees or those in receipt of private pension payments), they will be able to opt-in to pay the regular payments through their PAYE code so long as they have sufficient PAYE income to do so.

Further guidance from HMRC on the changes is expected in 2027.

How we can help

If you are within the Self-Assessment regime, now may be a good time to consider how you manage your cash flow to begin to prepare for the transition to the new regime in 2029/30. Our team can help model the impact of these changes and identify any planning opportunities as further details emerge. Fill in the form below and one of the team will be in touch.