Consultation closes on earlier tax payments
The HMRC consultation on timely payments in Income Tax Self Assessment (ITSA) has closed, following a 6-week run from 23 June to 4 August 2026. The proposal would require around 2.1 million self-employed taxpayers and landlords with sufficient PAYE income to make payments toward their self assessment liability through their employer's payroll.
The government will publish its response in autumn 2026, with relevant legislation to follow in a Finance Bill before the April 2029 implementation date.
Profession raises major concerns
Leading accountancy bodies, including ICAEW, have raised significant concerns about the proposals. The key worry is straightforward: the PAYE system is not ready to handle this volume and complexity.
ICAEW points to existing PAYE problems, including disputed charges and incorrect coding notices, as evidence that HMRC systems and customer support cannot currently support this change. The body notes that moving tax collection to payroll could damage the relationship between employers and their team, creating confusion about whether HMRC or the accountant is responsible when things go wrong.
Who will be affected
Around 7 million self-assessment taxpayers also have PAYE income from employment. Of these, roughly 2.1 million are expected to earn enough to fall within the new rules and see payments collected through their pay.
HMRC is also exploring whether non-PAYE taxpayers should make direct payments more frequently (potentially monthly or quarterly) rather than two payments on account each year. This would affect the remaining self-employed population.
What your clients need to know
If your contractors, freelancers, or landlords also receive PAYE income, this change could simplify their personal cash flow when it lands in 2029. However, there is real concern within the profession that the transition will be rocky. The consultation response, due this autumn, will reveal whether the profession's concerns sway HMRC's approach.
For now, advise clients to plan for potential payment timing changes, and monitor HMRC's formal response to the consultation in autumn 2026. A tax planning review with a qualified accountant can help self-employed clients understand their cash flow exposure to these changes before implementation.