Self Assessment Instalments: The 2029 Double Tax Year Explained

Tax Queen

Tax Expert @ Pie

3 min read

What You Need to Know

This doesn't change your current tax return. You still file and pay under the existing Self Assessment rules. The reported plan to move sole traders onto monthly or quarterly tax payments would only start later in the decade.

Right now, most self-employed people pay through two payments on account, which are advance payments towards next year's bill, due on 31 January and 31 July. They then make a balancing payment for anything still owed. If you want a refresher, our guide to how Self Assessment payments on account work explains how they're worked out. [Editor Note: Unverified - confirm payment dates against HMRC guidance]

According to the report, the Budget would replace these with instalments paid during the year as you earn. We haven't been able to check the details against GOV.UK, so for now treat this as a proposal rather than a confirmed rule. [Editor Note: Unverified - confirm the policy, its start date and the Chancellor's name against the Budget documents and HMRC guidance]

Why Critics Call It a Double Tax Year

The worry is the changeover. In 2029, people could be paying the previous year's tax under the old system while also making instalments for the current year. The Federation of Small Businesses calls this "a year of double taxation".

The report says around three million workers could be affected. [Editor Note: Unverified figure - check against HMRC guidance] The FSB has written to the Chancellor asking for the plans to be shelved, and the Association of Independent Professionals and the Self-Employed has called for the policy to be reversed.

The concern is cash flow. Self-employed income often comes in "feast or famine" bursts, so a big invoice one month can be followed by weeks of waiting to be paid. If you want to plan ahead, our guide on budgeting for your Self Assessment tax bill covers practical ways to set money aside.

How This Fits with Making Tax Digital

This proposal is separate from Making Tax Digital for Income Tax, which already requires some sole traders and landlords to send quarterly updates to HMRC. Those updates are summaries of your income and expenses, not tax payments.

Our article on whether HMRC calculates your tax from MTD quarterly updates explains that your tax is still worked out when you file your final return. If payments did become quarterly, the records you already keep for MTD would make it easier to see what you owe as you go.

Getting Ready for Whatever Comes Next

Until the rules are confirmed, it helps to track your tax month by month rather than once a year. Putting aside a share of each payment when it arrives, and logging your expenses straight away, will make any overlap year much easier to manage.

If your income arrives in uneven bursts, Pie Tax is self-assessment software for sole traders, freelancers and landlords. It pulls in your income and sorts your allowable expenses through the year, so you can see roughly what you owe long before an instalment falls due.

If you'd like a clearer view of your tax before any new payment schedule arrives, the easiest first step is to start recording this year's figures now. Try Pie Tax for free.