On 23 June 2026, HMRC opened a consultation that could fundamentally change when founders pay their tax bill. The proposal: move Self Assessment payments closer to when income is actually earned, rather than settling everything in January. The changes wouldn't take effect until April 2029 — but three years of lead time is exactly the right moment to understand what's coming and make sure your finances are structured for it.
What's Being Proposed
HMRC's timely payments consultation covers two groups of Self Assessment taxpayers.
Group one: people with both Self Assessment and PAYE income. This covers founders who draw a salary from their company — which includes most Runway clients. From April 2029, HMRC proposes collecting a forecast of their Self Assessment liability in-year through their PAYE tax code, deducted each payday rather than arriving as a single January bill. The forecast would be based on the most recent tax return.
Group two: Self Assessment taxpayers without PAYE income. For sole traders, landlords, and others whose income isn't taxed at source, HMRC is exploring whether the current two-instalment pattern — January and July — should become more frequent, potentially monthly or quarterly.
Nothing here is law yet. This is a consultation, open until 4 August 2026. The final shape of the rules will depend on responses received and legislation that follows.
What Won't Change
The government has been clear: no one will pay more tax overall. The total bill stays the same. What changes is the timing — spreading the same liability across the year rather than concentrating it in January.
For the January deadlines this year and next, nothing changes. Current rules remain in force.
Why It Still Matters for Founders
The total being the same doesn't mean the impact is neutral. For founders, the January Self Assessment bill often includes dividend income, rental income, or other untaxed earnings — and having twelve months between earning and paying creates a natural opportunity to plan and invest. Smaller, more frequent deductions reduce that window.
For a director-shareholder drawing salary and dividends, the practical effect could be significant. Instead of a January bill covering dividend tax, that liability could start appearing in monthly payslip deductions — reducing take-home pay throughout the year rather than arriving as a lump sum to manage against savings or business reserves.
The cash flow impact will vary significantly by individual. But the direction of travel is clear: HMRC wants less of a gap between earning income and collecting tax on it.
What This Means for How You Structure Things
The consultation reinforces a broader shift already underway. Making Tax Digital is live. Quarterly reporting has started for higher earners. Real-time records are becoming the baseline expectation.
Founders who run clean, current books — and who work with an advisor who reviews their position in-year rather than just at year-end — will navigate this comfortably. Those who treat tax as a once-a-year exercise will find the transition more disruptive.
Three practical things worth doing now:
- Review your remuneration structure. If more of your tax starts being collected through PAYE, the optimal split between salary, dividends, and pension contributions may shift. This is worth modelling with current numbers, not 2028 numbers.
- Build a clearer in-year tax position. Whether or not timely payments become law, knowing what your tax liability looks like throughout the year — not just in January — is sound financial practice.
- Keep an eye on the consultation outcome. HMRC publishes a response in Autumn 2026. That's when the shape of the final rules will start to become clear.
For full details on the consultation, see HMRC's timely payments consultation. It closes 4 August 2026.
The tax system is moving in one direction: more real-time, more digital, more frequent. The timely payments consultation is the latest step in that journey. The founders who treat it as a planning prompt now — rather than a compliance problem in 2029 — will be well ahead of it when it lands.
If you want to understand how these changes could affect your tax position and cash flow, speak to a Runway co-founder.
