HMRC's proposed monthly tax collection system could leave millions facing overlapping payment demands during the transition
Up to 3.6 million self-employed workers could be forced to pay two years' worth of income tax within just 14 months.
Experts have warned workers the change could come amid HM Revenue and Customs' (HMRC) proposed overhaul of the self-assessment system.
The revenue authority plans to move self-assessment taxpayers onto a PAYE-style monthly tax collection system from April 2029.
The proposals, first reported last month, would replace the current twice-yearly payment structure with automatic monthly deductions.
However, tax experts have warned the transition could create an expensive overlap between the outgoing and incoming systems.
HMRC's consultation, which closed earlier this week, acknowledged that 30 per cent of the 12 million taxpayers currently within the self-assessment system make payments on account.
This means millions of freelancers, landlords, side-hustle earners and investors could be affected by the changes.
Self-employed taxpayers would still need to make their first payment on account for the 2028-29 tax year on January 31, 2029, followed by a second instalment on July 31.
From April 2029, the new monthly deductions would begin at the same time, creating overlapping tax obligations.
The Association of Taxation Technicians has illustrated the potential impact with an example involving a self-employed worker earning £50,000.
Under the current rules, they would pay two instalments of £4,866 in January and July 2029.
At the same time, they would also begin paying £811 each month under the new system from April 2029 until March 2030.
The combined tax bill across the 14-month period would total £19,464.
The association warned this could create significant cash-flow pressures for affected taxpayers.
Dan Neidle, founder of Tax Policy Associates, said: "It would be a mistake to do this, and I hope the Government will realise that."
Charlene Young, pensions and savings expert at AJ Bell, said: "It's 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."
She also warned about the potential for incorrect tax calculations.
Ms Young added: "There's an obvious risk HMRC gets its sums wrong, as relying on tax forecasts could mean it collects too much."
Tax commentator Mike Warburton described the proposals as "an accident waiting to happen", warning they could create further confusion for taxpayers.
Defending the proposed changes, a 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 will set out further details in due course."
Mr Neidle has suggested an alternative approach that he believes would reduce pressure on taxpayers.
He proposed cancelling the final payment under the existing system and allowing taxpayers to repay that amount interest-free over several years.
Mr Neidle argued this would still provide a cash-flow benefit to the Exchequer while making the transition more manageable for self-employed workers.
The consultation on the proposals closed earlier this week and the Government has not yet published its formal response.
