Is monthly payment coming for Self Assessment? What HMRC is consulting on and what it could mean for self-employed individuals, CIS subcontractors and landlords in the UK!
A quiet but important change could move Self Assessment from a “pay at the end” model to a “pay as you go” model
For many taxpayers in the UK, Self Assessment has worked for years under a simple, even if sometimes painful, rule: you earn the money during the tax year, file the return after the end of the year, and then pay the tax through the classic combination of a Balancing Payment and, where applicable, Payments on Account.
That logic is now being reviewed by the government. On 23 June 2026, HMRC published the official consultation Timely Payments in Income Tax Self Assessment (ITSA), asking for views on bringing tax payments closer to the point at which income is earned. The consultation is open until 4 August 2026, and the government is expected to publish a response in autumn 2026.
The topic may seem technical. In reality, it is one of the most important discussions for self-employed individuals, CIS subcontractors, landlords and people who combine PAYE income with income reported through Self Assessment. If Making Tax Digital for Income Tax changes the way income and expenses are reported, this consultation goes a step further and raises the sensitive question: when should the tax be paid?
Why is this discussion happening now?
The government is starting from a real problem: under the current system, there is often a long gap between the moment a taxpayer earns the money and the moment the related tax is paid.
In the factsheet published on GOV.UK, the government states that approximately 12 million people file a Self Assessment tax return each year, and around 7 million of these also have PAYE income, such as salary or pension income. Tax on PAYE income is collected monthly by employers or pension providers, while tax on income reported through Self Assessment can be paid up to 22 months after the income is received. GOV.UK also notes that approximately 1 in 5 Income Tax Self Assessment bills are paid late, which can lead to penalties and interest.
This is the fiscal context behind the consultation: HMRC wants a system where tax payments are more regular, more predictable and less dependent on one large payment date. From the government’s perspective, smaller and more frequent payments may reduce the risk of tax debt. From the taxpayer’s perspective, however, such a change can have a significant impact on cash flow.
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What is “Timely Payments in ITSA” actually about?
“Timely Payments” does not mean, at this stage, that monthly payment has already been introduced for all Self Assessment taxpayers. It is essential that the message is presented correctly.
The consultation has two main components. The first concerns taxpayers who have Self Assessment income, but also have sufficient PAYE income. For this group, the government has announced that, from April 2029, part of the estimated tax relating to Self Assessment would be collected through the PAYE system, meaning through the tax code, during the tax year.
The second component looks at whether the rules should also be changed for other ITSA taxpayers, including those who do not have sufficient PAYE income, such as many self-employed individuals, CIS subcontractors and landlords.
In other words, this is not about a new tax. It is about a possible change to the timing of when tax is paid.
That difference matters enormously. For a taxpayer, the final amount of tax may remain the same, but if payment is required earlier or in more frequent instalments, the impact on the monthly budget can be very different.
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PAYE + Self Assessment: the change announced for April 2029
The clearest part of the reform relates to people who have PAYE income and, at the same time, income reported through Self Assessment.
Common examples include:
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an employee with rental income;
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an employee who does freelance work;
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a pensioner with property income;
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someone with a full-time job and a self-employed activity on the side.
For this group, GOV.UK explains that, from April 2029, Self Assessment taxpayers who also have PAYE income will need to pay towards their Self Assessment tax bill through their regular PAYE payments, where they have sufficient income for this to be possible. The government also states that no one should pay more tax than they currently do; the change is about timing, not the total tax liability.
The proposed mechanism is relatively simple in principle, but complex in practice. HMRC would use the most recent Self Assessment tax return to estimate the future liability. Where possible, HMRC would update the tax code, and the estimated tax would be collected through PAYE at each payday. If the person knows that their income or estimated liability will be significantly higher or lower, they may be able to update the forecast through an online form.
For someone paid monthly, this change would feel like monthly collection. For someone paid weekly or at another interval, the collection would follow their payday rhythm. That is why the correct wording is not necessarily “monthly payment for everyone”, but collection through PAYE at each payday for taxpayers with sufficient PAYE income.
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Self-employed individuals, CIS subcontractors and landlords without sufficient PAYE: still under consultation
For taxpayers who do not have sufficient PAYE income, the situation is different. There is not yet a final rule here. The government says it is exploring the possibility of comparable reforms for other ITSA taxpayers.
At present, many self-employed individuals, CIS subcontractors and landlords pay through the Payments on Account system. This system normally requires two equal advance payments, due on 31 January and 31 July, if the ITSA liability is over £1,000 and less than 80% of the tax has already been collected at source, for example through PAYE. Any remaining amount is paid through a Balancing Payment by 31 January after the end of the tax year.
The government is considering whether this system should be changed to create more frequent payments, closer to the tax year in which the income is earned. The consultation mentions examples such as monthly or quarterly payments. In a case study involving a self-employed plumber, GOV.UK illustrates the possibility of an estimated liability being split into either 12 monthly payments or 4 quarterly payments, but this is presented as an option under consultation, not as a final rule.
For the Romanian community in the UK, this distinction is very important. A CIS subcontractor should not automatically assume that from 2029 HMRC will take their tax monthly. But they should not ignore the topic either. The direction is clear: the government wants a system where Self Assessment is less dependent on one or two large payments made a long time after the money was earned.
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The £1,000 threshold: a small detail with a big effect
Another sensitive point in the consultation is the current £1,000 threshold for Payments on Account.
At present, if the Self Assessment liability is below £1,000, or if more than 80% of the tax has already been collected at source, the taxpayer does not usually enter the Payments on Account system. GOV.UK states that approximately 70% of individuals in Self Assessment do not meet the current criteria for POA, either because the previous liability was below £1,000 or because more than 80% of the tax was already collected at source. These taxpayers generally pay in one lump sum by 31 January after the end of the tax year. The government is now asking whether the £1,000 threshold is still appropriate.
Panic should be avoided here. The threshold has not yet been reduced, and the discussion is strictly at consultation stage. However, the fact that this threshold is being placed on the table shows that the government is considering whether more taxpayers should be brought into a system of more regular payments.
For those with low or irregular income, this discussion could be significant. A reduction in the threshold could mean that people who currently pay a single amount on 31 January may, in the future, be pushed towards more frequent payments or payments closer to the tax year in which the income is earned.
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It is not a tax increase. But it may make cash flow harder
An important message, both for clients and the wider public, is this: a change in timing does not automatically mean a higher tax bill.
If the final liability is £3,000, the reform does not necessarily mean the liability becomes £4,000. But it may mean that the £3,000 is collected earlier or more frequently. For HMRC, this may reduce the risk of tax debt. For the taxpayer, it may reduce the shock of a large payment on 31 January. But for those with fluctuating income, high costs, tight cash flow or weaker business periods, earlier payment may create pressure.
This is one of the central tensions of the consultation. The current system can create large surprises at the end. A more regular system can create discipline, but it can also reduce flexibility. For an employee with stable income and a small rental profit, collection through PAYE may be relatively easy to manage. For a sole trader with seasonal income, or a CIS subcontractor with strong months and weak months, a more frequent payment system must be designed carefully.
That is why the consultation also talks about safeguards, situations where income changes, and the need for taxpayers to be able to update their forecast. HMRC recognises that some taxpayers have complex or fluctuating income and that, in some cases, different payment routes may be needed within the same tax year.
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The link with MTD ITSA: more frequent reporting, possibly payment closer to income
This consultation should not be read in isolation. It is part of a broader direction: digitalisation, more regular reporting and a more continuous relationship between the taxpayer and HMRC.
MTD ITSA changes the way certain people within Self Assessment keep their records and report income and expenses. Timely Payments raises the next question: if the data is more digital and more regular, should the payment of tax also become closer to the point at which the money is earned?
For accountants, this change confirms that the professional role is increasingly moving from “preparing the return at the end” to “monitoring data, cash flow and compliance throughout the year”. For taxpayers, it means that records left until late, lost receipts, unreconciled bank transactions and rushed estimates will become increasingly risky.
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What should taxpayers do now?
At this stage, the most important thing is not to turn the consultation into a false certainty, but also not to ignore it. For people with PAYE + Self Assessment, the change from April 2029 appears to be the most concrete. For those without sufficient PAYE, including many self-employed individuals, CIS subcontractors and landlords, the discussion around Payments on Account is still at consultation stage.
However, preparation should not be delayed until the rules become final. An organised taxpayer should understand whether they have PAYE income and Self Assessment income, check how Payments on Account work, estimate cash flow, keep clear digital records and speak to their accountant about possible scenarios.
For CIS subcontractors, it is important that tax deducted at source is treated correctly and not confused with a normal expense. For landlords, it is essential to keep records of rental income, mortgage interest information, repairs, agent fees and other property costs. For those with a job plus extra income, it is important to understand that, from 2029, the tax code could become a tool through which HMRC also collects estimated tax for income reported through Self Assessment.
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Conclusion: do not panic, but prepare
The question “is monthly payment coming for Self Assessment?” has a nuanced answer.
For all Self Assessment taxpayers, the answer is: no, there is not yet a final rule introducing monthly payment for everyone.
For taxpayers with PAYE income + Self Assessment, the answer is: yes, the government has announced a change from April 2029, under which estimated Self Assessment tax would be collected through PAYE where there is sufficient income.
For self-employed individuals, CIS subcontractors and landlords without sufficient PAYE, the answer is: the reform of Payments on Account is still under consultation, including the possibility of monthly or quarterly payments.
This is not a change in tax rates. It is a possible change in rhythm. But in tax, rhythm matters. For many taxpayers, the difference between tax paid 18 months later and the same tax paid during the year can be the difference between comfortable cash flow and strained cash flow.
The practical rule is simple: do not wait until 2029 to understand what is happening. Follow the government’s response in autumn 2026, keep your records up to date and prepare your business for a system in which HMRC is moving increasingly towards digital reporting, in-year estimates and payments closer to the moment income is earned.
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Need help with Self Assessment, CIS, landlords or cash flow planning?
DCTaxAgent Ltd can help self-employed individuals, CIS subcontractors, landlords and people with PAYE + Self Assessment income understand their tax obligations, Payments on Account, MTD ITSA, digital records and the possible impact of the 2029 reforms.
WhatsApp: 07587 532646
Website: www.dctaxagent.co.uk
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Disclaimer
This article is for informational and educational purposes only and does not constitute personalised tax advice, legal advice or advice regarding employment status.
The final rules may depend on the government’s response to the consultation, future legislation, each taxpayer’s circumstances, income level, income sources, tax code, PAYE income, position with HMRC and any applicable exceptions.
DCTaxAgent Ltd accepts no responsibility for decisions made solely on the basis of this article without personalised advice. For a proper analysis, speak to an accountant or tax adviser.