HMRC reports that roughly 12 million people file a Self-Assessment tax return each year. Of these, ~7 million also have Pay as You Earn (PAYE) income, arising from either employment or receiving a pension.
Whilst employers and pension providers pay tax on PAYE income each month, tax arising on Self-Assessment income is paid by individuals up to 22 months after it is received. The current system has been found to result in ~one in five Income Tax Self-Assessment tax bills paid late, and ~1.1 million Payments on Account being missed in January 2025, with 75% of these resulting in tax debt.
From 2029, taxpayers will be required to pay towards their Self-Assessment tax bill through their regular PAYE payments, rather than in one bulk payment after the tax return is filed.
HMRC will use your most recent tax return to forecast your payments and update your tax code to ‘code in’ the Self-Assessment tax required to be paid. If your most recent tax return is inconsistent with what is likely to be arising in the current tax year, contact HMRC to adjust the in-year tax payments.
Taxpayers are still required to file a tax return, as usual, by 31st January the following tax year, and pay any remaining balance on account.
Whilst this directly applies to Self-Assessment taxpayers who make one payment after filing, ~3 million Self-Assessment taxpayers make two Payments on Account each year towards their tax bill. No decisions have been made reflecting any changes to this group.
Responses to this consultation are expected in Autumn 2026.
