Self-assessment: tax to be paid in instalments through the year from April 2029

The government plans to change when people who file a Self Assessment return pay their income tax. The changes were announced at the 2025 Budget and are due to take effect from April 2029. The aim is for tax to reach HMRC closer to when income is earned, rather than more than a year later.

How it works now

Currently, self-employed people must file their return and pay tax for the whole of the previous tax year by 31 January. If their bill was £1,000 or more, they also make payments on account towards the following year. There are two equal payments, due on 31 January and 31 July. Together they equal the previous year's tax bill.

Polish Express gives an example: if someone owed £2,000 for the 2024/25 tax year, the payment on account for 2025/26 will be £2,000, paid in two instalments of £1,000.

What is going to change

According to the government consultation "Timely Payments in Income Tax Self Assessment", from April 2029 people with sufficient PAYE income are to pay their forecast Self Assessment tax in instalments through PAYE, each payday. The forecast is to be based on the last return filed.

The government is also consulting on whether similar, more frequent payments should apply to other taxpayers, such as those whose income comes only from self-employment. Polish Express says monthly payments are the most likely option for them, but the government has not yet settled the details. The outlet says the change could affect up to 3.6 million taxpayers, but not all self-employed people.

The government has said it will publish its response to the consultation in autumn 2026, after analysing the views submitted. Legislation is due to be included in a Finance Bill ahead of implementation in April 2029.

Experts' concerns

The government argues that smaller, regular payments will make it easier to plan spending and reduce the risk of arrears. Critics point out, however, that seasonal businesses or those with uneven income may struggle to pay in weaker months. Experts quoted by Polish Express also warn that old and new payments may overlap at the start, putting pressure on cash flow. They are calling for a transition period. The outlet also says the government wants to collect arrears from previous years in instalments.

Polish Express also notes that Making Tax Digital (MTD) will apply from April to people with income above £30,000.

What this means for you

The changes affect anyone running a sole-trader business or filing Self Assessment, for example because of additional income. For now, nothing changes: the current 31 January and 31 July deadlines apply until April 2029. The final shape of the rules is not yet known, so it is worth following the government's response to the consultation and setting aside part of your income for tax early.