The Monthly Tax Bills Self-Employed Consultation has now closed. HMRC opened the consultation on 23 June 2026 and accepted responses until 4 August 2026.
As of September 2026, the government has not published its formal consultation outcome, with a summary of responses expected in autumn 2026.
One important change has already been announced. From April 2029, people who have both Self Assessment liabilities and sufficient PAYE income will be expected to make payments towards their forecast Self Assessment tax through PAYE during the tax year.
However, monthly or quarterly direct payments for people whose income is mainly or entirely within Self Assessment remain under consideration and have not yet been confirmed.
Have Monthly Tax Bills Been Confirmed For Self-Employed Workers?
No. A universal requirement for every self-employed person to pay their tax monthly has not been confirmed.
There are two distinct parts to the government’s proposals.
The first relates to people who have both PAYE income and Self Assessment liabilities. From April 2029, taxpayers with enough PAYE income are expected to make payments towards their forecast Self Assessment liability through their PAYE tax code.
This part of the reform was announced at Budget 2025.
The second part concerns people who cannot have sufficient Self Assessment tax collected through PAYE.
The consultation explored whether their existing Payments on Account could be made more frequently, potentially creating a system of smaller and more regular payments.
No final decision has yet been announced for that second group. HMRC’s June 2026 factsheet specifically states that no decisions have been made about potential changes to their Payments on Account.
Self-employed taxpayers should therefore avoid assuming that everyone will automatically receive a monthly HMRC tax bill from 2029.
Will The Monthly Tax Bills Self-Employed Consultation Open Again?
There is currently no confirmation that the consultation will reopen. It ran from 23 June to 4 August 2026, and the government is now reviewing the responses.
| What Happens Next | Current Position |
| Consultation Reopening | No reopening announced |
| Government Response | Expected in autumn 2026 |
| Final Payment Rules | Not yet confirmed |
| PAYE-Linked Changes | Planned from April 2029 |
| Further Consultation | Possible, but not announced |
The next major update is expected to be the government’s response, followed by further details on how the reforms would operate.
Who Could Be Affected By The Self-Assessment Payment Changes?
The reforms could eventually affect several groups of self-assessment taxpayers, although the exact treatment will depend on their income.
The confirmed April 2029 change is particularly relevant to people who:
- Have Employment Tribunal Income Alongside self-employment or other Self Assessment income
- Receive A Pension Through PAYE While also having taxable income that must be reported through Self Assessment
- Have Sufficient PAYE Income To allow HMRC to collect some forecast Self Assessment tax through their tax code
HMRC says around 12 million individuals file a Self Assessment return and around 7 million of them also have PAYE income.
People whose income is entirely or mainly within Self Assessment could also eventually face changes, but the method has not yet been decided.
That group could include sole traders, freelancers, landlords, contractors and other taxpayers who currently make direct Self Assessment payments.
How Do Self-Employed People Currently Pay Their Tax?
Under the current Self Assessment system, many taxpayers make Payments on Account towards their next tax bill.
Payments on Account normally involve two instalments:
- First Payment Due by 31 January during the relevant tax year
- Second Payment Due by 31 July after the tax year has ended
If these instalments do not fully cover the final liability, any remaining amount is generally paid as a balancing payment by the following 31 January.
HMRC says around three million Self Assessment taxpayers currently make two Payments on Account each year.
The present arrangement means there can be a considerable delay between earning income and paying the associated tax. HMRC says the gap can reach as much as 22 months in some circumstances.
The timely-payment proposals are intended to reduce this delay by moving tax collection closer to when income is earned.
How Has The Consultation Impacted Self-Employed Workers?
The consultation has not changed current Self Assessment payment deadlines. Self-employed workers should continue following the existing rules until new legislation takes effect.
However, it has highlighted several possible future impacts:
- More Frequent Payments: Tax could be collected in smaller amounts throughout the year
- Cash-Flow Changes: Businesses may have less time between earning pension income and paying tax
- Forecasting Requirements: Payments could initially be based on estimated liabilities
- Irregular Income Challenges: Seasonal businesses and freelancers may need greater flexibility
- More Financial Planning: Businesses may need to monitor income, expenses and future tax liabilities more closely
For now, these remain future considerations rather than immediate changes for most self-employed taxpayers.
How Could More Frequent Self Assessment Tax Payments Work?
The consultation considers two different ways of bringing Self Assessment payments closer to real time.
Paying Self Assessment Tax Through PAYE
From April 2029, a taxpayer with sufficient PAYE income could have an estimated Self Assessment liability incorporated into their PAYE tax code.
HMRC would initially use information from the taxpayer’s latest Self Assessment return to forecast the amount likely to be due.
The PAYE code could then be adjusted so that part of the forecast liability is collected through employment or pension income during each pay period.
The taxpayer would still file a Self Assessment return. Once the actual liability was known, any remaining amount would have to be settled and any necessary adjustment could be made.
Monthly Or Quarterly Direct Tax Payments
For taxpayers without sufficient PAYE income, HMRC has considered whether Payments on Account could be collected more frequently.
This could mean replacing two relatively large instalments with smaller payments spread across more of the year.
However, HMRC has not confirmed whether such direct payments would be monthly, quarterly or structured differently.
Until a final government response and detailed legislation are published, descriptions of compulsory monthly tax bills for every self-employed worker should be treated cautiously.
Will Tax Payments Be Based On The Previous Year’s Income?
The initial forecast for taxpayers paying Self Assessment liabilities through PAYE is expected to use information from the most recently completed Self Assessment return.
This creates an obvious challenge for people whose business income changes significantly from one year to another.
A sole trader could, for example, have earned £40,000 in the year covered by the latest tax return but expect only £25,000 in the current year. Using historical figures without adjustment could result in payments being set too high.
The reverse could also happen where a business grows quickly.
HMRC’s proposed approach would allow taxpayers to provide updated information when they expect their actual liability to be significantly higher or lower than the original forecast.
HMRC says an online process could be used to make the forecast and in-year payments more accurate.
The consultation also asked whether other information, including Making Tax Digital updates or reputable third-party data, could eventually improve forecasting.
What Happens If PAYE Income Is Not Enough To Cover The Tax Bill?
Having PAYE income does not necessarily mean that an entire Self Assessment liability can be collected through payroll.
HMRC must consider how much can reasonably be deducted from employment or pension income.
Under existing PAYE rules, the amount of tax deducted in a pay period is generally capped at 50% of PAYE income. The consultation asked whether different thresholds could be appropriate for particular taxpayers.
A taxpayer whose self-employed profits increase considerably may reach a point where their PAYE earnings are no longer sufficient to collect the forecast Self Assessment liability without exceeding the applicable safeguard.
In HMRC’s consultation example, the taxpayer can move away from collection through PAYE and pay the remaining Self Assessment liability separately. If circumstances change again, the tax code could potentially be updated so collection through PAYE resumes.
The system could therefore involve different payment methods during the same tax year.
What Happens If A Client Has Not Paid The Invoice Yet?
Late-paying customers are one of the practical problems that need to be considered when moving tax payments closer to when taxable activity occurs.
A freelancer or contractor may complete substantial work during one period but not receive payment until weeks or months later. Seasonal businesses may face similar problems when revenue is concentrated in particular parts of the year.
HMRC acknowledges that people with complex, seasonal or fluctuating income need careful consideration when the final payment system is designed.
This makes accurate forecasting particularly important.
A workable system would need to allow taxpayers to update estimates when circumstances change rather than continuing to collect tax based on income that is no longer realistic.
Self-employed businesses may therefore need to pay greater attention to:
- Expected Income Based on current contracts and trading conditions
- Outstanding Invoices That could affect available cash
- Business Expenses that may reduce taxable profit
- Seasonal changes that cause large differences between monthly income
- Forecast Updates: When actual performance differs significantly from earlier estimates
Could Self-Employed Workers Face Overlapping Tax Payments In 2029?
The transition to the proposed system is one of the most significant issues raised by the consultation.
From April 2029, affected taxpayers could start making in-year payments towards their forecast liability for 2029 to 2030. At the same time, they may still have amounts to pay under the existing Self Assessment system for the previous tax year.
For example, a taxpayer could make a July 2029 Payment on Account towards an earlier liability while also having tax collected through PAYE for the current tax year.
A balancing payment relating to the previous period could then become due in January 2030.
This does not mean the taxpayer’s actual tax liability is automatically doubled. It means tax relating to different tax years could temporarily be collected during the same period.
The Association of Taxation Technicians has warned that this could cause confusion and create the impression that affected taxpayers are paying two years’ tax at once.
Transition arrangements will therefore be an important part of the government’s final design.
What Safeguards Could Protect Self-Employed Taxpayers?
HMRC’s consultation recognises that bringing tax payments forward could cause problems if estimates are inaccurate or taxpayers have irregular income.
Several protections are therefore being considered.
The 50% PAYE Deduction Safeguard
Existing PAYE arrangements normally prevent tax deductions in a pay period from exceeding 50% of PAYE income.
The purpose of this limit is to protect a reasonable level of net income. HMRC consulted on whether the same approach remains appropriate under the new system and whether certain groups might benefit from a different threshold.
Updating An Estimated Tax Liability
Taxpayers whose income changes substantially should be able to update HMRC rather than continuing with an inaccurate forecast.
This could be particularly important following:
- A Major Loss Of Clients
- A Sharp Increase In Business Income
- Temporary Closure Of A Business
- Significant Changes In Allowable Expenses
- Changes Between Employment And Self-Employment
Balancing Payments And Refunds
Forecast payments will not remove the need to establish the taxpayer’s actual final liability.
A Self Assessment return would still be filed. Differences between estimated payments and the final amount would then need to be reconciled.
How Could More Frequent Tax Bills Affect Business Cash Flow?
More regular payments could help some self-employed people because they would avoid having to reserve money for one or two large tax bills.
For others, moving tax payments closer to the period in which income is generated could reduce the amount of cash temporarily available inside the business.
The effect is likely to depend heavily on the type of business.
A consultant receiving a predictable monthly retainer may find regular payments relatively straightforward. A construction subcontractor, seasonal retailer or freelance professional waiting several months for a large invoice could have a very different experience.
The transition year may require particularly careful planning because new in-year payments could overlap with outstanding liabilities under the existing system.
Businesses affected by the eventual reform may therefore benefit from separating money for tax, maintaining accurate bookkeeping and regularly reviewing cash-flow forecasts rather than relying solely on annual calculations.
What Have Tax Experts Said About The HMRC Proposals?
Professional tax organisations have raised concerns about how the proposed system could work in practice.
The Association of Taxation Technicians argued in its July 2026 consultation response that the proposals could add complexity and administrative burdens.
It also raised concerns about the age and reliability of data used to calculate estimated liabilities, fluctuating income and confidentiality where Self Assessment liabilities are collected through an employer’s payroll.
The ATT suggested that one alternative could be to retain the existing Payments on Account structure while increasing the frequency of instalments, for example by moving to quarterly payments.
The Chartered Institute of Taxation also submitted a formal response to the consultation in July 2026.
These are consultation responses rather than final government decisions. The eventual rules could therefore differ from both the original proposals and the alternatives suggested by professional bodies.
Is Timely Tax Payment Different From Making Tax Digital?
Yes. Making Tax Digital and timely Self Assessment payments are separate reforms.
Making Tax Digital focuses primarily on digital record keeping and more regular reporting of business information.
The timely-payment proposals focus on when tax is actually paid.
A taxpayer could therefore have responsibilities under Making Tax Digital while still following the existing Self Assessment payment timetable until any new payment rules applying to them take effect.
HMRC describes the reforms as separate but complementary. More regular reporting could potentially help produce better tax forecasts, while more timely payments are intended to reduce the gap between earning taxable income and paying the resulting liability.
The distinction is important because submitting information more frequently does not by itself mean that tax automatically becomes due every month.
Can Self-Employed People Already Pay HMRC Monthly?
Self-employed people who prefer to put money towards their tax bill regularly do not necessarily have to wait for the proposed reforms.
HMRC already provides ways for taxpayers to make voluntary payments towards future Self Assessment liabilities.
The important difference is that voluntarily budgeting or making regular payments now is not the same as being legally required to settle a forecast tax liability every month.
For businesses that find January and July bills difficult to manage, setting aside tax throughout the year can make the existing system easier to budget for.
A taxpayer should still make sure the required Self Assessment amount reaches HMRC by the relevant statutory deadline.
What Happens Next After The Consultation Closed?
The Monthly Tax Bills Self-Employed Consultation closed on 4 August 2026.
As of 25 September 2026, the GOV.UK consultation page remains marked as closed and does not display a final consultation outcome. HMRC’s published factsheet says a summary of responses is expected in autumn 2026.
The key points to watch are:
- Final Payment Frequency: For taxpayers who cannot pay sufficient Self Assessment tax through PAYE
- Forecasting Rules: For calculating expected liabilities
- PAYE Safeguards designed to protect take-home income
- Transition Arrangements For taxpayers with old and new liabilities overlapping
- Support for Irregular Income, including seasonal businesses
- Employer Requirements: Where additional Self Assessment tax is collected through PAYE
- Implementation legislation is needed before the April 2029 changes take effect
Until further details are published, taxpayers should continue following the existing Self Assessment payment rules that apply to them.
Conclusion
The Monthly Tax Bills Self-Employed Consultation represents a potentially significant change to when some taxpayers pay Income Tax, but it does not mean that all self-employed people have already been ordered to start paying HMRC monthly.
The confirmed direction is that, from April 2029, taxpayers with sufficient PAYE income will make payments towards forecast Self Assessment liabilities through PAYE.
More frequent direct Payments on Account for other Self Assessment taxpayers remain under consideration.
With the consultation now closed, attention turns to the government’s response and the detailed rules that will determine payment frequency, forecasting, safeguards and the 2029 transition.
Frequently Asked Questions
Will Self-Employed People Have To Pay Tax Monthly From 2029?
Not necessarily. People with sufficient PAYE income are expected to make forecast Self Assessment payments through PAYE from April 2029. More frequent direct payments for other self-employed taxpayers have not yet been finalised.
When Would The New Self Assessment Payment Rules Start?
The announced PAYE-linked changes are intended to begin from April 2029. Further details will depend on the final design and legislation.
Will Monthly Tax Payments Increase The Amount Of Tax Owed?
The government’s stated policy is to change the timing of tax collection rather than increase the amount of tax due solely because payments become more frequent. The final liability will still depend on the normal tax rules and the taxpayer’s circumstances.
Could HMRC Collect Self Assessment Tax Through A PAYE Tax Code?
Yes. From April 2029, taxpayers with sufficient PAYE income are expected to make payments towards forecast Self Assessment liabilities through PAYE, with HMRC adjusting their tax code where appropriate.
Will Sole Traders Have To Pay Tax Before Their Customers Pay Them?
The final arrangements have not yet been settled. HMRC has recognised that seasonal and irregular income could create difficulties and says these circumstances must be considered when designing payment timings and safeguards.
Will Payments On Account Be Replaced By Monthly Payments?
That has not been confirmed. The consultation explored more frequent Payments on Account for taxpayers who cannot use PAYE, but HMRC says no decision has yet been made for this group.
What Happens If A Self-Employed Person’s Income Falls During The Year?
The proposed system would allow affected taxpayers to tell HMRC when their expected tax liability changes significantly. Their forecast and in-year payments could then be adjusted to better reflect their current circumstances.