Self Assessment Payments from April 2029: What Is Changing?

The Budget on 28 October 2026 confirmed a new approach to paying Self Assessment tax from April 2029. It affects taxpayers who are required to make payments on account. The policy direction is settled; the detailed payment dates, safeguards and transitional arrangements are still being developed.

Who is affected

At present, if you pay tax through Self Assessment you normally make two payments on account each year, in January and July, followed by a balancing payment the next January. You do not have to make payments on account if the tax you owed through Self Assessment last year was less than £1,000, or if more than 80% of last year's tax was paid outside Self Assessment, for example through your tax code. The reform applies to those who make payments on account; it does not change anything for people who fall outside them.

How the payments will work

Calculation

Payments will continue to be based on the previous year's tax; you will be able to update the amount online if your circumstances change. Your annual tax return will still establish your final liability. The reform changes when you pay, not how much tax you owe.

Payment methods

Payments will be automated, for example by Direct Debit. If you have employment income or a private pension taxed under PAYE, you will be able to choose to have the payments collected through your tax code instead. This is an option, not a requirement.

Frequency and support

The government has not yet decided how often payments will be collected. Further detail is expected in 2027, including the transitional arrangements, penalties, interest, and safeguards for taxpayers in financial difficulty. HMRC also plans to introduce digital tools from 2028 to help taxpayers estimate their liability, track their payments and make voluntary payments.

The transition in 2029-30

HMRC has said that 2029-30 will be a transition year: you will make the final payment for the previous tax year while starting payments under the new arrangements. How much those payments will overlap depends on the timetable still to be published, so it is worth reviewing your tax reserve once the detail is known, rather than assuming that your usual provision will cover the transition.

Cash flow implications

Our view is that the practical priority will be matching your tax reserve to income that may vary during the year.

Landlords and business owners should review their reserves alongside seasonal receipts, expenses and borrowing costs.

Clients with overseas income should consider exchange rate movements, the timing of foreign tax payments and any foreign tax credit claims when reviewing projected UK liabilities.

Clients moving to or from the UK should arrange a review of their expected tax position, because the previous year may not be a reliable guide in a year of arrival or departure. Overseas residents without UK employment or pension income will not be able to use the PAYE route, and paying by Direct Debit may need a UK bank account.

What to do now

This reform does not change your current payment deadlines. Continue to make your payments on account in January and July as usual. As the detailed rules emerge, review your tax reserve, your income forecasts and any expected changes in your circumstances.

We can help you assess your projected liability and prepare a cash flow plan for the transition.

This article reflects announcements available on 29 October 2026. The detailed implementation rules are still being developed.