Timely Payments in Income Tax Self Assessment consultation – LITRG response

In the Autumn Budget 2025, the government announced the intention to reform the timing of Self Assessment tax payments. HMRC recently launched a consultation seeking views on how those reforms could be implemented, including proposals for taxpayers with both PAYE and Self Assessment income from April 2029, as well as potential reforms to the current payments on account regime for other Self Assessment taxpayers. 

While we recognise that more frequent payments may help some taxpayers budget more effectively, we do not support the collection of Self Assessment liabilities via the PAYE system unless this is voluntary or taxpayers are able to opt out. 

We are broadly supportive of a potential reform of the current payment on account regime, which is complicated and difficult for some taxpayers to understand, and can lead to budgeting challenges. However, we emphasise the need for flexibility to be built into any new payment system, to reflect fluctuating and seasonal incomes. 

In our response we highlight a number of key concerns including:

• the operational complexity of the PAYE system,
• the importance of maintaining accessible support and non-digital routes for taxpayers who cannot engage digitally, 
• the interaction with third-party data, Making Tax Digital for income tax, student loan repayments and universal credit, 
• the need for robust safeguards and user testing before any mandatory rollout. 

We also make a number of recommendations, including promoting the use of existing budgeting tools such as HMRC’s Budget Payments Plans.