As part of the Autumn Budget 2026 announced on 28 October 2026, the government confirmed a major reform to Income Tax Self Assessment (ITSA) collection. From April 2029, ITSA taxpayers will be required to make automated in-year tax payments, such as through direct debit mandates, replacing the current twice-yearly payment on account system. Eligible taxpayers will also have the option to pay through Pay As You Earn (PAYE) where they have concurrent employment income. This measure aims to reduce the £30bn+ tax debt owed to HMRC by smoothing cashflows and improving compliance. The change will be phased, with digital prompts and support provided during the transition. Tax agents and software developers must prepare for integration with HMRC’s Making Tax Digital (MTD) infrastructure.
Key Takeaways
- Mandatory Automation: Self-employed individuals and landlords with ITSA obligations must set up automated payment methods by April 2029, ending manual payment on account.
- PAYE Integration Option: Taxpayers with both employment and self-employment income can opt for tax collection via their PAYE code, simplifying administration.
- Agent and Software Readiness: Accountants and software providers should begin updating workflows and client communication plans well ahead of the 2029 deadline.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement