The British government has announced plans to reform the way self-employed workers pay their taxes, moving from annual lump-sum payments to a system of more frequent payments aligned with earnings. Starting in April 2029, individuals who submit tax returns through self-assessment and expect to earn more than £1,000 annually will be required to make tax payments on a quarterly or potentially monthly basis.

Currently, about 12 million taxpayers in the United Kingdom use the self-assessment system, which calculates tax liabilities based on the previous year’s income. While the tax bill will still be determined on prior earnings under the new arrangement, the regular payment schedule aims to spread tax obligations throughout the year rather than concentrating them into one or two large payments.

This shift builds on recent reforms by HM Revenue and Customs (HMRC), including the roll-out of the “making tax digital” initiative, which mandates that self-employed individuals file their financial accounts online quarterly. The enhanced digital reporting is designed to provide a clearer and more timely picture of earnings, facilitating the transition to regular tax payments.

Tax specialist Harinder Sandhu, founder of EmpowerRD, noted that the move toward frequent, smaller payments could benefit many self-employed workers by reducing the financial stress associated with large, infrequent tax bills. He added that more regular payments may improve individuals’ ability to manage their cash flow and plan finances with greater certainty.

The reforms reflect a broader government effort to modernize the tax system by leveraging technology and promoting fiscal responsibility among taxpayers with variable incomes. The impact on self-employed workers is expected to vary, with some welcoming the opportunity to budget more effectively, while others may face challenges adapting to the new payment cadence.