[UK] Consultation on Income Tax Self Assessment payments through PAYE

In April 2029, Income Tax Self Assessment payments through PAYE are coming to the UK. Before its implementation, the government is asking people to contribute to a consultation, SmallBusiness.co.uk reports.

The UK government is making tax changes for individuals with self-employment income as well as income from pay as you earn (PAYE). They are expected to take effect from April 2029.

The changes are reportedly being introduced because one in five Self Assessment bills is paid late, with potential fees and penalties added on top.

Tax gap figures released in June 2026 reveal a 6.4 per cent gap between the tax that was supposed to be collected and the tax actually collected for the 2024/25 tax year, amounting to £59.2 billion in unpaid tax. 

Small businesses represent the largest proportion of that tax gap (62 per cent), with around half the gap being for corporation tax.

The figures showed that 1.1 million Payments on Account were missed in 2025, with the person paying the tax falling into debt in 75 per cent of the cases, resulting in penalties and interest.

Under the new system, individual taxpayers who have both Self Assessment and PAYE must contribute to their Self Assessment payments through their regular PAYE payments.

The amount paid will reportedly remain the same, however, the frequency of payments will increase. The aim is to space out tax payments so that the self-employed don’t pay out big chunks at a time, affecting their cash flow.

HMRC detailed the following amendments:

• HMRC will use an individual’s most recent tax return to estimate their payments

• Where possible, it will update their tax code to determine how much Self Assessment income is taken through PAYE income alongside existing tax on their employment or pension

• If a self-employed person knows their tax is going to be significantly higher or lower than usual, they can tell HMRC using an online form

• Taxpayers will file their tax return as usual, by January 31, while paying any other remaining tax

• There will be the possibility of increasing the frequency of payments on account; a balancing payment may reportedly be introduced at the end of the following January if tax is outstanding after the first two payments

Government Consultation

The government has opened a consultation into how these changes will be implemented. The consultation will consider:

• How and when to set payments

• How to protect taxpayers

• How the transition should go

• Additional safeguards to help with the transition

The consultation will reportedly be open until August 4, 2026. Responses can be made via the online form. Enquiries and responses may also be submitted to timelypayment@hmrc.gov.uk.

Source: SmallBusiness.co.uk

(Links via original reporting)

In April 2029, Income Tax Self Assessment payments through PAYE are coming to the UK. Before its implementation, the government is asking people to contribute to a consultation, SmallBusiness.co.uk reports.

The UK government is making tax changes for individuals with self-employment income as well as income from pay as you earn (PAYE). They are expected to take effect from April 2029.

The changes are reportedly being introduced because one in five Self Assessment bills is paid late, with potential fees and penalties added on top.

Tax gap figures released in June 2026 reveal a 6.4 per cent gap between the tax that was supposed to be collected and the tax actually collected for the 2024/25 tax year, amounting to £59.2 billion in unpaid tax. 

Small businesses represent the largest proportion of that tax gap (62 per cent), with around half the gap being for corporation tax.

The figures showed that 1.1 million Payments on Account were missed in 2025, with the person paying the tax falling into debt in 75 per cent of the cases, resulting in penalties and interest.

Under the new system, individual taxpayers who have both Self Assessment and PAYE must contribute to their Self Assessment payments through their regular PAYE payments.

The amount paid will reportedly remain the same, however, the frequency of payments will increase. The aim is to space out tax payments so that the self-employed don’t pay out big chunks at a time, affecting their cash flow.

HMRC detailed the following amendments:

• HMRC will use an individual’s most recent tax return to estimate their payments

• Where possible, it will update their tax code to determine how much Self Assessment income is taken through PAYE income alongside existing tax on their employment or pension

• If a self-employed person knows their tax is going to be significantly higher or lower than usual, they can tell HMRC using an online form

• Taxpayers will file their tax return as usual, by January 31, while paying any other remaining tax

• There will be the possibility of increasing the frequency of payments on account; a balancing payment may reportedly be introduced at the end of the following January if tax is outstanding after the first two payments

Government Consultation

The government has opened a consultation into how these changes will be implemented. The consultation will consider:

• How and when to set payments

• How to protect taxpayers

• How the transition should go

• Additional safeguards to help with the transition

The consultation will reportedly be open until August 4, 2026. Responses can be made via the online form. Enquiries and responses may also be submitted to timelypayment@hmrc.gov.uk.

Source: SmallBusiness.co.uk

(Links via original reporting)