Income tax for landlords could move to monthly or quarterly payments under new proposals
Andy Noton, 11 August 2026
Andy Noton, 11 August 2026
Millions of Income Tax Self Assessment (ITSA) taxpayers, including many landlords, could be required to pay their tax bill in regular instalments during the tax year, rather than largely after it, under new proposals set out by the Government.
The consultation, published as part of Tax Update 2026, sets out two related changes that would apply from April 2029.
The first change covers ITSA taxpayers who also have a PAYE source of income, such as an employment or a private pension.
This will be a familiar position for many smaller landlords, whose rental profits sit alongside a salary or pension.
These taxpayers would have more of their forecast ITSA liability collected in-year through their tax code, in 12 monthly instalments worth 8.3 per cent each, with a balancing payment due the following January.
HMRC estimates around 2.1 million of the 12 million people currently in ITSA would fall within scope.
The second change covers taxpayers who make payments on account, where the Government is exploring a move from the current twice-yearly payments to monthly or quarterly instalments.
The £1,000 threshold that currently determines who needs to make payments on account could also be reduced, pulling more landlords and other taxpayers into the system.
The Government's stated aim is to reduce the number of people falling into tax debt, noting that around one in five ITSA bills are currently paid late.
However, it also raises questions about how comfortable this sits alongside earlier reassurances that Making Tax Digital would change how records are kept and reported, not when tax is due.
The consultation closed on 4 August 2026 and nothing has yet been confirmed, but the direction of travel is clear enough that landlords will want to understand what it could mean for them.
Landlords with a PAYE source of income should consider how a larger monthly deduction through their tax code would affect take-home pay.
Those who already make payments on account should also think about the cash flow impact of moving from two payments a year to twelve or four.
Changes to the tax system can have significant implications for landlords, property investors and businesses with property interests. Understanding how proposed reforms may affect your cash flow, tax liabilities and future planning is essential.
Our property and tax specialists work closely with landlords and investors to provide practical, tailored advice on tax compliance, property ownership structures and long-term planning.
If you would like to discuss how these proposals could affect you or your property portfolio, please contact our property partner, Andy Noton (andrewnoton@lubbockfine.co.uk)
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