HMRC just announced a big package of tax changes. Here's what freelancers need to know.

On 23 June 2026, the government published a huge set of tax announcements. Called Tax Update 2026: Simplification, Modernisation and Fairness, it includes 40 separate measures, covering consultations, proposals and confirmed changes, touching everything from how you pay your tax bill to how HMRC can collect it if you don't.

Not all of it is relevant to freelancers, but several proposals will affect you directly, and a handful are open for your response right now.

Whilst this sort of stuff might seem a bit dry, it's an important opportunity to ensure our voices as freelancers are heard, so the government get useful and tangible input at the right stage of the process.

1. The end of the big twice-yearly tax bill?

The government wants to change when self-employed people pay their Income Tax. Right now, most freelancers pay in two lump sums a year through Payments on Account. The proposal would shift to smaller, more frequent payments spread across the year instead.

If you also have some employed income alongside your freelance work, HMRC would collect more of your estimated tax through PAYE from April 2029. If you're purely self-employed, a separate consultation is looking at reforming Payments on Account to spread the cost more evenly.

In practice: smaller, more regular payments rather than two large ones. That might be welcome if you find it hard to save for a tax bill. But it also means less control over your cash flow, and you'd be paying based on estimates rather than what you've actually earned.

Consultation closes: 4 August 2026
Respond to the Timely Payments consultation

2. Mandatory direct debit for VAT and PAYE

If you're VAT-registered, or you pay yourself through PAYE via a limited company, the government wants to make direct debit the only way to pay those bills. Bank transfers and other payment methods would no longer be an option.

In practice: this might mean less control over exactly when money leaves your account. Freelancers who manage cash flow carefully, holding money in a savings account until the last possible moment, could find this disruptive - but it could also mean less stress, if it's one less thing to remember.

Consultation closes: 28 August 2026
Respond to the Direct Debit for VAT and PAYE consultation

3. HMRC wants the power to take money directly from your bank account

HMRC is consulting on new powers to recover tax debts by taking money directly from people's bank accounts in regular instalments, without needing a court order first.

This would apply to people who already owe money, who can afford to pay, and who have ignored more than 10 attempts by HMRC to make contact over at least nine months. The government says safeguards for people in financial difficulty would be included.

In practice: if you're on top of your tax affairs this shouldn't affect you. But it's worth knowing the direction HMRC is heading. If you have a tax debt you've been putting off, the time to contact HMRC proactively is before these powers are in place, not after.

Consultation closes: 16 August 2026 Respond to the tax debt recovery consultation

4. Making reckless statements on your tax return could become a criminal offence

The government wants to introduce a criminal offence for making reckless or deliberately untrue statements on Income Tax or Corporation Tax returns. This kind of rule already exists for VAT, so this proposal would bring the rest of the system into line.

In practice: this is aimed at deliberate dishonesty not honest mistakes. But it is a signal that HMRC is getting more serious about accuracy.

Consultation open, closes 16 August 2026. Respond to the reckless statements consultation

5. New VAT rules for selling through online platforms

If you sell goods or services through platforms like Etsy, Amazon, or similar marketplaces, a new consultation proposes extending VAT liability rules to cover UK-based sellers. Previously, this only applied to overseas sellers, who were brought into scope in 2021.

Under the proposal, the platform itself could become responsible for collecting and paying VAT on your behalf, which would change how you handle pricing and invoicing.

In practice: if your income comes through a marketplace, keep an eye on this one. It's still at consultation stage, but platforms are being pulled more and more into the tax collection process.

Consultation open, closes 18 August 2026
Respond to the online marketplace VAT consultation

6. E-invoicing is coming and the UK standard has been confirmed

The government is introducing e-invoicing as a mandatory requirement for all VAT invoices from 2029. Whilst this was announced previously, a standard has been agreed called "Peppol" as the network for electronic invoicing in the UK. become mandatory for VAT purposes from 2029.

In practice: this is still a few years away but it will eventually change how you invoice clients. Worth checking whether your accounting software provider is moving toward Peppol support.

7. Start a Small Business - Customer Journey review

The government is also planining to do comprehensive review of the end-to-end customer journey for small businesses when they're starting up. It will look at how businesses engage with HMRC, from starting out to ongoing compliance. The goal is to identify anyt pain points and opportunities to simplify and improve things, helping small businesses more easily understand and meet their tax obligations. This is a great thing, in our view!

The bigger picture

All of this sits in the context of a £59 billion tax gap, the difference between what HMRC thinks it's owed and what it actually collects. The government is under pressure to close it, and many of these measures are designed to do that.

Most freelancers who are on top of their accounting won't be significantly affected, but it's important to be aware of how the rules could change in the future.

The consultations that are open right now are a real opportunity to shape how these policies work in practice - and sharing your voice is an important act.