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Timely payments in Income Tax Self Assessment factsheet

Updated 28 October 2026

What is this about?

Around 12 million individuals complete a Self Assessment tax return each year, including people who are self-employed. Around 3 million of these taxpayers must make twice-yearly payments towards their next tax bill — known as Payments on Account.

How and when taxpayers make these Payments on Account is changing.

Under the current system, there can be a significant gap between earning income and paying the tax due on it. In some cases, tax is not paid until 22 months after earning the income. This delay can make it harder to budget and pay for large, sometimes unexpected, bills. This risks taxpayers making late payments and falling into tax debt, which can be costly and lead to penalties and interest. It is also costly for HM Revenue and Customs (HMRC) to collect.

Taxpayers currently make 2 Payments on Account a year. Each payment is usually half of the previous year’s tax bill:

• the first is due in January, 10 months into the tax year it relates to
• the second is due in July, 4 months after the tax year it relates to ends

If the 2 payments do not fully cover the total tax bill, a final balancing payment is due by the 31 January following the end of the tax year, when the tax return is also due. If too much tax has been paid, the taxpayer may be due a refund.

What is changing?

From April 2029, taxpayers who make Payments on Account will make smaller, more regular payments during the tax year in which they earn the income. The government has not yet made any final decisions on how often payments will be made under the new system. We will work with stakeholders and affected taxpayers to determine a payment schedule that can support a range of different types of taxpayers. More details will be shared in the future.

Payments will be automated, for example by Direct Debit. If a taxpayer has enough PAYE income from employment or a private pension, they will be able to choose to pay through PAYE, if they prefer.

Payments will continue to be based on tax owed in the previous year. Taxpayers will be able to update this online if their circumstances change. Taxpayers must still file their tax returns by 31 January each year.

This changes when taxpayers submit payments towards their bill, not the amount of Self Assessment tax they owe.

There will be a transition year in 2029 to 2030 as taxpayers will need to make their final payment for the previous tax year whilst starting to make payments under the new arrangements.

The government is confident taxpayers will be able to plan for this change. These taxpayers will have over 2 years to prepare, and the government will work with taxpayers and tax organisations to design the detail of the reform to ensure as smooth a transition as possible for everyone affected.

The government will also provide effective information, support and tools, including payment plans to support taxpayers to prepare for this change.

Who will this impact?

This will affect Self Assessment taxpayers that are required to make Payments on Account. Taxpayers in Income Tax Self Assessment must make Payments on Account, unless either:

• the amount of tax they owed last year was less than £1,000
• last year they paid more than 80% of the tax they owed outside of Self Assessment (for example through their tax code)

A taxpayer’s Self Assessment statement or online account will show them how much their Payments on Account are, if they need to pay them.

If taxpayers struggle to meet their obligations HMRC is committed to working with them to understand their circumstances and find a solution. Taxpayers in financial difficulty are encouraged to contact HMRC early, so they can help.

Why is this changing?

This reform will modernise Income Tax Self Assessment and the existing Payments on Account system, which is now 30 years old.

It will replace the current system of large, intermittent tax payments, often many months after income was earned, with smaller, more regular payments throughout the year as earnings come in. After these changes, taxpayers will be paying today’s tax with today’s income.

This will help taxpayers to budget, reduce the risk of tax debt, and move Self Assessment closer to the way many household bills already operate. No one will see any changes to their tax liability. The reform changes when taxpayers submit payments towards their bill, not the amount of tax they owe.

It will also align the UK with how equivalent tax is paid in other OECD countries, such as the US, Australia, France, Germany and Canada.

Next Steps

HMRC will continue to work with taxpayers, agents and other stakeholders on the detailed design of the new arrangements and further information will be provided in 2027.

Taxpayers and agents will be given guidance, tools and support to help them understand and prepare for the changes.