Charlene Young, of stockbroker AJ Bell, said HMRC’s proposal was “being billed as a measure to prevent bill shock twice a year, but it’s inevitably going to involve more admin, queries and phoning the creaking doom loop that is the HMRC helpline”.
“There’s an obvious risk HMRC gets its sums wrong, as relying on tax forecasts could mean it collects too much,” she added.
Taxpayers who are liable for a self-assessment include the self-employed and people who make more than £1,000 per year from alternative income streams such as landlords, investors and those with a successful side hustle.
Mike Warburton, The Telegraph’s tax expert, warned the changes represented “an accident waiting to happen” and could result in further confusion for taxpayers.
HMRC did not respond to a request for comment.
According to Mr Neidle, one solution would be to suspend the final payment under the old rules and instead have it paid interest-free over several years. This would still result in a cash-flow increase for HMRC, but a smaller one.
The move risks sowing further confusion among the self-employed taxpayers who already have to contend with the added bureaucracy of Making Tax Digital.
The first deadline for the much-maligned scheme would compel around 864,000 landlords and self-employed workers to report their income and expenses to HMRC four times a year for each self-employment or property income source – plus an annual self-assessment – via HMRC-approved third-party software.
The first digital filing deadline for those with an annual turnover of more than £50,000 is Aug 7.
An HMRC spokesman said: “No one will pay more tax, and spreading payments more evenly across the year will help customers avoid unexpected lump-sum bills.
“We recently sought views on how we can smooth any transition period for customers, and we’ll be setting out further details in due course.”
