In a radical move, HMRC plans to end twice-yearly tax bills for the seven million PAYE taxpayers inside self assessment, with monthly ‘payday’ payments
Following the introduction of mandatory Making Tax Digital for Income Tax for earners down to as low as £20,000 within the next two years, the direction of travel is clear with HMRC aiming for more regular, frequent in-year payments rather than the current twice annual payments for all self assessment taxpayers.
HMRC is now planning to change the current payment arrangements for income tax self assessment (ITSA) taxpayers related specifically to their PAYE-related income to a system of more frequent, monthly payments, based on a percentage of overall annual earnings. This is described as ‘more timely payment’ by HMRC and will start in less than three years’ time at the start of the 2029-30 tax year.
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