James Akrill - Frozen Bubble Photographer

The hidden tax measure in the Budget is huge for people paying tax under self-assessment - sole traders, partners, landlords, retired investors. For 6th April 2028-29, you currently pay 50% of your income tax late in the tax year in question (in January 2029), 50% just after the year end (in July 2029) with any make-up payment in January 2030. Under the new proposals you will pay your tax perhaps monthly or quarterly (TBC) from April 2029 onwards. A rough analysis suggests the impact is to draw about 50% of your tax bill forward, a huge cashflow boost to HMRC and a significant funding issue for the self-employed. The Treasury recognises this, and expects to raise £1.3bn of additional tax in 29/30 as a result of this change. The cashflow impact of the accelerated charge will send some businesses to the wall.

Proposed “administrative” change to self assessment will have a big hit on farmers, investors and the self employed from 2029. It appears HMRC wants to accelerate the payment of self assessment tax meaning these people will have to find their tax payments earlier, and potentially on money they haven’t even earned yet! Great for HMRC’s cash flow, much worse for the people having to fund cash earlier.