HMRC has launched a consultation on "Timely Payments" for Self Assessment taxpayers, proposing to collect more tax through PAYE from April 2029, fundamentally reshaping how practitioners manage client cash flow and tax planning.
HMRC has launched a significant consultation on "Timely Payments" for Self Assessment taxpayers, exploring ways to collect more tax during the year rather than relying on large payments due each January and July. This consultation, which emerged from the wide-ranging package of consultations and policy announcements published by HMRC on 23 June 2026, aimed at making the tax system simpler, more digital and fairer, represents a fundamental shift in how the UK administers Self Assessment.
What the proposal means
Under current rules, Self Assessment taxpayers typically face two sizeable tax bills: one in January and another in July. For taxpayers who have both PAYE income and Self Assessment income, the proposal could require more of their tax liability to be collected through PAYE from April 2029. For your clients who run side businesses, operate property portfolios, or have mixed employment and self-employment income, this change could be material. The government's stated intention is to smooth payments across the year, improving taxpayer cash flow and reducing reliance on lump-sum settlements.
Broader reforms on the horizon
HMRC is also considering wider reforms to the Payments on Account regime for other Self Assessment taxpayers. This signals that the timing consultation is not an isolated measure but part of a comprehensive review of how and when tax is collected. The Payments on Account regime—currently a key planning tool for practitioners advising on cash flow—may face significant changes. Accountants should anticipate that clients may need to adjust their liquidity forecasting and tax planning strategies accordingly.
Practical implications for your practice
The current consultation phase offers an opportunity to influence the proposals. While many of the proposals are still at consultation stage, they give us an indication of the government's direction of travel over the next few years. For practices with substantial portfolios of self-employed clients or partnerships with mixed income, the transition to earlier PAYE deduction could simplify year-end accounting but may require software upgrades and client education.
Now is a good opportunity to review bookkeeping and invoicing systems, with businesses already using modern cloud accounting software likely to find the transition easier than those relying on manual processes.
The consultation also hints at broader digital modernisation: the full implementation roadmap is expected later in 2026. Practices should monitor HMRC's website and the Treasury's response to the consultation closely, as the final timetable and detailed mechanics will determine how significantly this affects client tax positions.
Looking ahead
With the Budget 2026 set to be delivered on 28 October 2026, further detail on the Timely Payments proposals and any companion policy changes may emerge. For practitioners advising on tax planning, business restructuring, and succession, these reforms underscore the importance of forward-looking, agile strategies that account for a shifting tax administration landscape.
Practitioners should ensure they understand the consultation's scope and timeline, engage with their professional bodies for guidance updates, and prepare clients for potential changes to payment patterns from April 2029 onwards.