Minister denies reports self-employed could be forced to pay tax HMRC monthly based on last year's earnings

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It follows reports that the Government has been looking at plans to deduct tax each month based on the previous year's earnings.

The new regime would apply to anyone earning income above a yet-to-be determined threshold from April 2030, the Telegraph reported.

Pressed on the reports by Tom Swarbrick, Lucy Rigby said: "I don't have the detail of the consultation ,but I don't think that is what is going to be happening."

She added that the government had been drawing up plans to make HMRC more efficient.

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"Everything to do with HMRC is the work of my colleague, the Exchequer Secretary," she told Tom.

"He has been doing some really key things to try and ensure that HMRC works more efficiently and more effectively, and importantly, for people right across the country, is easier to engage with."

Experts told the Telegraph that the tax changes would have disrupted cash flow for self-employed people because of the unpredictable nature of their income.

Zena Hanks, a partner at accountancy firm, Saffery said: "For the self‑employed, this is going to cause huge disruption to cash flow.

“The principles are sound, ensuring tax is paid closer to income being received, but you can’t predict future income easily.”

Currently, self‑employed taxpayers make payments on account in January and July based on the previous year’s tax bill.

The proposed changes would have forecast their tax liability based on the previous year's tax bill and split the payments into monthly instalments.

It would risk leaving some people with seasonal income fluctuations forced to pay tax during periods with little or no earnings.

Ms Rigby was also asked by Tom about whether Rachel Reeves had been a successful Chancellor.

Ms Reeves is expected to argue during a speech at Mansion House later today that she has left the economy in a better place than she found it in, in a last-ditch attempt to keep her job under incoming Prime Minister Andy Burnham.

Defending her record, Ms Rigby claimed the Chancellor had "stabilised" the economy - although she stopped short of answering directly when asked if Ms Reeves had a legacy to be proud of.

"Think about what she inherited and that chaos, the people in my constituency whose mortgages were going through the roof.

"She's stabilised the economy. She's brought about that really important stability that's seen levels of private investment go up."

However, she admitted that the government "need to go much further in strengthening our economy. My point is that progress has been made over the last two years in each of the ways that I've been setting out."

She was also asked by Tom if more money needed to be spent on MPs' security, following the alleged murder of former MP Ann Widdecombe in her home in Dartmoor last Thursday.

The Treasury official described the growing need for more security as "deeply troubling".

She replied that there is a "range of measures" available to MPs and that security was always kept "under review".

"On the security that MPs specifically receive, they can ask for additional security. There's a range of measures that can be put in place.

"Each of those things has increased over recent years, but as the Home Secretary made clear in the chamber yesterday, she will always keep the security that is available to MPs under review, such that if we do need to up levels of security then we stand ready to do that."

On Monday, it was announced that Counter-terrorism police had taken on the lead in the investigation into the death of Ann Widdecombe, after “new information and evidence" came to light.