3 Million Self-Employed Face Two Tax Bills in One Year, as Healey’s Shake-Up Pulls In £17bn

News | By Matt, Editor

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 John Healey’s Budget. The Office for Budget Responsibility says the overlap, along with a related PAYE change, will bring the Treasury an extra £17 billion in cash in 2029-30.

The Federation of Small Businesses has written to the Treasury calling the plan “completely unworkable”. “Under the new proposals, in 2029 the self-employed will have to pay around two years’ worth of tax in one go,” it said, according to the Telegraph.

Right now, people who make Payments on Account pay two lump sums towards their bill, in January and July, and settle any balance the following January. Some don’t pay the tax until 22 months after they earned the money.

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From April 2029, they’ll pay smaller instalments during the year they earn it. Ministers haven’t decided whether that means monthly or quarterly.

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 OBR says that, in that year, they pay towards both their previous and current year’s bills.

One example worked out by Sunday Times Money and reported by GB News: someone with a £20,000 annual tax bill could face £10,000 payments in January and July 2029, plus about £1,666 a month from April.

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”. It says the number of self-employed people and sole traders fell by 157,000 in the year to January 2026.

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 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”.

Our view: paying tax closer to when you earn it is fine in principle. Hitting three million people with two tax bills in one year, in the year the Chancellor needs the cash, isn’t.

Read more: £350m of Labour’s £100 energy payment goes to the richest fifth

Sources

• Office for Budget Responsibility, October 2026: Economic and fiscal outlook, paragraphs 3.13 and 3.25 and Chapter 6
• HM Treasury / HMRC, Budget 2026: Timely payments in Income Tax Self Assessment factsheet
• The Telegraph, 8 November 2026: FSB letter to the Treasury; Healey Budget speech quote
• GB News, 9 November 2026: Sunday Times Money example; Andrew Griffith quotes
• Which?: What self-employed workers need to know

Main image: John Healey at the Pentagon, March 2025, U.S. Department of Defense / PO1 Alexander Kubitza, public domain, with a Self Assessment tax return, Images of Money, CC BY 2.0.