Around three million people who pay tax through Self Assessment, many of them self-employed, face two tax bills in one year under a change in Chancellor John Healey's Budget. From April 2029, they will pay smaller instalments during the year they earn the money, instead of settling most of the bill months later.

The catch is the switch. The government's own factsheet says that in 2029-30 taxpayers "will need to make their final payment for the previous tax year whilst starting to make payments under the new arrangements". The Office for Budget Responsibility (OBR) says the overlap, along with a related PAYE change, will bring the Treasury an extra £17 billion in cash in 2029-30.

Business groups warn of cash-flow crunch

The Federation of Small Businesses (FSB) has written to the Treasury calling the plan "completely unworkable". It warned that "in 2029 the self-employed will have to pay around two years' worth of tax in one go". The FSB says some small firms are already borrowing at 11% to stay afloat, and warns that self-employed income is often "feast or famine".

The change will apply to self-assessment taxpayers who owe more than £1,000 in tax a year. Someone earning £40,000 a year in profit would owe around £7,130 in income tax and National Insurance, or about £600 a month if payments were monthly. Ministers have not yet decided whether payments will be monthly or quarterly.

Ministers insist no one pays more overall

The Treasury insists nobody pays more tax overall. Its factsheet says the change is to when taxpayers submit payments towards their bill, not the amount of Self Assessment tax they owe, and that people "will have over 2 years to prepare".

In his Budget speech, Healey said he was "proudly backing Britain's entrepreneurs to succeed". Shadow Chancellor Andrew Griffith called the policy "anti-business" and told Labour to think hard about "the impact a year with two tax bills could have on hard-working people". The Federation of Master Builders warned of a "crunch point", with builders facing their usual tax bill while also having to pay up for the new system. Read the Breaking Brexit News report on the OBR figures and The Sun's report on the Budget tax change.