Self Assessment payments on account to change from April 2029

Self Assessment’s twice-yearly payments on account are being replaced from April 2029. Taxpayers who currently make them will instead pay smaller amounts at regular intervals during the tax year, collected automatically, with the option of paying through PAYE if they have enough employment or pension income. Budget 2026 confirmed the reform and published the government’s response to the consultation held over the summer.

How payments on account work now

HMRC’s factsheet says around 12 million people file a Self Assessment return and around 3 million of them must make payments on account. Each is usually half of the previous year’s bill:

• the first is due on 31 January, ten months into the tax year it relates to
• the second is due on 31 July, four months after that tax year ends
• any balance is due on the following 31 January, with the return

Payments on account are not needed where last year’s Self Assessment tax was less than £1,000, or where more than 80% of last year’s tax was collected at source, for example through a tax code. HMRC says that in some cases tax is not paid until 22 months after the income is earned.

What will change from April 2029

According to the factsheet and the Budget documents:

• taxpayers who make payments on account will make smaller, more regular payments during the tax year in which the income is earned
• payment frequency has not been decided and will be designed with stakeholders
• payments will be automated, for example by Direct Debit
• people with enough PAYE income from employment or a private pension can choose to pay through PAYE instead
• payments will still be based on the previous year’s tax, and taxpayers will be able to update them online if their circumstances change
• returns will still be due by 31 January
• 2029-30 will be a transition year, because taxpayers will be making their final payment for 2028-29 while starting payments under the new arrangements

HMRC will introduce digital tools from 2028 to help taxpayers estimate their liabilities, track progress against their forecast and make voluntary prepayments. More detail is promised in 2027.

What the consultation changed

Budget 2025 had announced that Self Assessment taxpayers with sufficient PAYE income, about 2.1 million people, would be required to make in-year payments through PAYE each pay period. The consultation ran from 23 June to 4 August 2026 and received 3,630 responses. Most opposed compulsory collection through PAYE, citing cash flow for people with irregular income, the difficulty of forecasting, loss of control and the burden on payroll teams.

The government has accepted that. Automated in-year payments, such as by Direct Debit, will be the default, and paying through PAYE will be an opt-in for those who want it. In-year payments will also be extended to everyone who currently makes payments on account, so that employees with side income and the self-employed are treated alike.

Why it matters

The Chancellor told the Commons he was “reforming the administration of self-assessed income tax from 2029”. The change does not alter anyone’s tax liability, but it moves cash to the Exchequer sooner: the Budget document puts the gain at £1.36 billion in 2029-30, rising to £1.82 billion in 2031-32.

What it means for accountants and their clients

Cash flow planning becomes a year-round conversation. Clients used to setting money aside for January and July will need a monthly or quarterly budget instead. The transition year needs particular care, because clients will be clearing 2028-29 while paying towards 2029-30.

Irregular earners will need regular reviews. Payments based on last year’s bill may be too high for a client whose income has fallen. Practices should plan to review forecasts during the year and update them online, as they now do with claims to reduce payments on account.

Agent access to Direct Debits matters. In the parallel consultation on Direct Debit for VAT and PAYE, agents said they need to see and manage clients’ mandates and know what HMRC intends to collect before it does. The same issues will arise here, and practices should press for agent visibility as the design is finalised. See Direct Debit for VAT and PAYE from April 2029.

MTD data will sit alongside it. Many of the same clients will be sending quarterly MTD updates by then, which gives practices regular figures to sense-check in-year payments. See MTD for Income Tax after Budget 2026.

For the current rules, read our guide to payments on account and to HMRC’s budget payment plan, or use the payments on account calculator.

Frequently asked questions

When do the new Self Assessment payment rules start?

From April 2029. The 2029-30 tax year is a transition year, in which taxpayers make their final payment for 2028-29 while starting payments under the new arrangements.

Will I pay more tax under the new system?

No. HMRC says the reform changes when payments are made towards a Self Assessment bill, not the amount of tax owed.

Will my employer collect my Self Assessment tax?

Only if you choose. Automated payments such as Direct Debit will be the default, and people with enough PAYE income from employment or a private pension can opt to pay through PAYE.

Who will the change affect?

Self Assessment taxpayers who have to make payments on account, around 3 million people. It does not affect those whose previous year’s bill was under £1,000 or who paid more than 80% of their tax at source.