Paying Self Assessment Online in Liverpool: What Changes in 2026

Paying Self Assessment online works the same way in 2026: you pay HMRC by 31 January 2027 and, if you have payments on account, again by 31 July 2027. The change for Liverpool drivers is Making Tax Digital (MTD), which shows your tax position every quarter without moving the date you pay.

This is a 2026 update, not a beginner's walkthrough. If you need the basic login and payment steps, read our earlier guide to paying Self Assessment online in Liverpool first. Here we focus on what is different for the 2026/27 cycle: the bigger January bill, the new quarterly picture, paying in advance, clearing a debt and the local costs that land at the same time.

Key takeaways

• The 31 January 2027 payment usually combines your 2025/26 balancing payment with your first 2026/27 payment on account; the second payment on account is due 31 July 2027.
• MTD for Income Tax started on 6 April 2026 for qualifying income above £50,000. It adds quarterly updates but does not change when you pay.
• The threshold falls to £30,000 from 6 April 2027, so many full-time Liverpool drivers will see quarterly estimates from the 2027/28 tax year.
• A Budget Payment Plan lets you pay weekly or monthly ahead of the deadline; a Time to Pay arrangement spreads a bill you cannot clear.
• Budget for Liverpool City Council licence and plate fees alongside your tax, and keep receipts as business costs.

What is paying Self Assessment online?

Paying Self Assessment online means settling your Income Tax and Class 4 National Insurance bill electronically, through your bank, the HMRC app, a debit card or Direct Debit, using your UTR plus the letter K as the reference. For self-employed drivers the main dates are 31 January and 31 July each year.

The tools for paying Self Assessment online have not changed much since last year. What has changed is the context around them, and that matters more for your cash flow than which button you press.

What has changed for Liverpool drivers paying Self Assessment online in 2026?

Three things are new for the 2026/27 cycle. MTD for Income Tax began on 6 April 2026 for higher earners and widens in April 2027. The HMRC app is now a mainstream way to pay. And many drivers face their first full payments on account after a busy year, which makes January 2027 heavier than expected.

None of these change the core rule. According to HMRC's Pay your Self Assessment tax bill guidance, you pay the balancing payment for the previous tax year plus your first payment on account by 31 January, and your second payment on account by 31 July. The money must reach HMRC by the deadline, not just leave your account.

For a Liverpool private hire vehicle (PHV) or hackney carriage driver, the practical shift is planning. You now have more information during the year, more ways to pay early and a clearer route if you fall behind. Used well, they turn January from a shock into a routine.

Which Self Assessment payments are due in the 2026/27 cycle?

Two payment dates matter in the next year. By 31 January 2027 you pay any 2025/26 tax still owed plus your first 2026/27 payment on account. By 31 July 2027 you pay the second 2026/27 payment on account. The final balance for 2026/27 then falls due on 31 January 2028.

The table below separates payment dates from reporting dates, because MTD adds several new reporting deadlines that are easy to confuse with tax bills.

According to HMRC's guidance on payments on account, each instalment is usually half of the previous year's bill and includes Class 4 National Insurance. You do not have to make them if last year's bill was under £1,000, or if more than 80% of your tax was collected outside Self Assessment, for example through a tax code.

Does Making Tax Digital change when you pay Self Assessment?

No. MTD for Income Tax changes how and how often you report, not when you pay. Quarterly updates are summaries of income and expenses sent through software. GOV.UK's MTD guidance says you still submit your return and pay your tax by 31 January after the tax year ends, and pay your bill as you do now.

The difference is visibility. After each quarterly update, your software or HMRC online account can show an estimate of your tax for the year so far. That estimate is not a bill. It is a planning figure that helps you decide how much to set aside, whether to pay early and whether your payments on account look too high or too low.

For drivers, that is useful. Earnings swing with the football calendar, concerts, cruise ship days and quiet winter weeks. A quarterly estimate lets you adjust your savings while the year is still running, rather than finding out in January. Our explainer on Making Tax Digital for ride-hailing drivers covers the reporting side in more depth.

Who joins MTD next, and when?

According to HMRC's MTD eligibility guidance, sole traders and landlords join based on qualifying income in an earlier tax year. Qualifying income is broadly your gross self-employment and property income before expenses, so check GOV.UK for how yours is worked out.

• Over £50,000 in 2024/25: MTD from 6 April 2026 (already started).
• Over £30,000 in 2025/26: MTD from 6 April 2027.
• Over £20,000 in 2026/27: MTD from 6 April 2028.

Because the test uses turnover rather than profit, a full-time Liverpool driver with modest profits can still cross £30,000. The 2025/26 return you file by 31 January 2027 is the one that decides whether you join in April 2027. If you need help getting set up, see our Making Tax Digital service for drivers.

How do you pay Self Assessment through the HMRC app or online account?

Sign in to the HMRC app or your HMRC online account, check the amount due, then choose to pay through your bank. GOV.UK says the app lets you pay through your own bank's app or online banking. Use your UTR followed by K as the reference, and pay at least a few days early.

1. File your 2025/26 return early so the 31 January 2027 figure is final, not a guess.
2. Open the HMRC app or sign in to your HMRC online account and view what you owe, including any payment on account.
3. Check the figure against your own records or your accountant's tax computation.
4. Choose to pay through your bank account, approve the payment in your banking app, and confirm the reference is your UTR plus K.
5. Save the confirmation screen, then check your HMRC statement a few working days later to see the payment allocated.
6. Add 31 July 2027 to your calendar for the second payment on account, or set up a Budget Payment Plan to cover it.

The steps for paying Self Assessment online are the same whether you drive through an app, a local operator or a hackney rank. For the full filing routine before you pay, follow our step-by-step Liverpool tax return guide.

How long does each payment method take to reach HMRC?

Most online methods reach HMRC the same or next day. Bacs and a repeat Direct Debit take three working days, and a first Direct Debit takes five working days. If a deadline falls on a weekend or bank holiday, slower methods must arrive by the last working day before it, so plan around 31 January.

GOV.UK also notes that the Post Office no longer accepts Self Assessment payments. If you still use a paying-in slip, you can pay at your bank or building society.

Should Liverpool drivers use a Budget Payment Plan to pay in advance?

For most drivers with uneven earnings, yes. A Budget Payment Plan collects weekly or monthly Direct Debits towards your next bill, so the January total builds up gradually. You must be up to date with your last Self Assessment bill to start one, and you can pause payments for up to six months.

According to HMRC's guidance on paying weekly or monthly, you set the plan up in your online account under Direct Debit. If your payments do not cover the whole bill, you pay the difference by the deadline. If you overpay, you can ask for a refund.

The pause option suits Liverpool driving patterns. You might pay more during the summer events season and pause in a slow January week. Just remember that a pause does not move the deadline, so restart in time to cover the full amount.

What if you cannot pay the January 2027 bill in full?

Contact HMRC before 31 January 2027 rather than ignoring the bill. You may be able to set up a Time to Pay arrangement, which spreads the debt over monthly payments. Interest still runs on the unpaid tax, but an agreed plan is far better than letting late payment penalties build up.

HMRC's January 2026 news release said people who owe less than £30,000 and meet the eligibility criteria may be able to set up a plan themselves. You can check eligibility and apply using HMRC's guidance if you cannot pay your tax bill on time. You will need your UTR, bank details and a summary of your income and spending.

If you cannot set it up online, HMRC lists a Self Assessment payment helpline on 0300 200 3820, open Monday to Friday, 8am to 6pm. HMRC checks whether the plan is affordable. If a plan cannot be agreed, it will ask for the full amount, which is when professional HMRC support can help.

According to HMRC's Self Assessment penalties guidance, late payment penalties are 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest. Filing late adds a separate £100 penalty, even if you pay on time.

Can you reduce your payments on account for 2026/27?

Yes, if you expect your 2026/27 bill to be lower than 2025/26. You can ask HMRC to reduce payments on account in your online account or on form SA303. But if your final bill is higher than the reduced amount, HMRC charges interest on the difference, so base any reduction on real figures.

This is where the new quarterly picture helps anyone paying Self Assessment online. If you are already in MTD, your estimates give you evidence for a reduction. If you are not, keep your own monthly totals of fares, fees and mileage. Our tax calculator gives a quick rough figure to compare against your payments on account.

Which Liverpool costs should you set aside for alongside your tax?

Liverpool City Council licence costs often fall in the same months as your tax. The council lists a £180 three-year driver licence fee, £78.99 for an enhanced DBS check, medical fees that vary and £180 a year to renew a vehicle plate. Plan for these in your monthly budget.

According to Liverpool City Council's taxi licence renewal fees page, drivers aged over 65 pay £75 for a one-year licence instead. The council's vehicle plate page says a new private hire plate costs £185, and older vehicles (private hire over eight years, hackney over 11 years) must renew every six months.

• Driver licence renewal: £180 for three years, collected by the council after you submit your documents.
• Enhanced DBS check with online ID verification: £78.99.
• Vehicle plate renewal: £180 a year, or every six months for older vehicles.
• Medical certificate: fees vary by doctor.
• Tax check code: free, but you need it before the council can process a renewal, and it expires after 120 days.

These licence costs are generally treated as costs of your trade, so keep each receipt for your return. If you claim simplified mileage instead of actual vehicle costs, ask your accountant which vehicle-related fees the flat rate already covers. Our list of allowable expenses for ride-hailing drivers explains the wider rules.

On clean air, Liverpool City Council's air quality page describes monitoring and joint work with neighbouring councils, but does not set out a charging Clean Air Zone at the time of writing. So there is no zone charge to budget for at present. Check the council's pages before relying on this, because local plans can change.

Illustrative example: a Liverpool driver plans the 2026/27 payments

This is an illustrative example using an invented driver and simplified figures. Driver K drives private hire in Liverpool. Her 2025/26 Income Tax and Class 4 National Insurance come to £4,800. She paid two payments on account of £1,700 each for 2025/26, so £3,400 is already paid.

In late October 2026 she sets up a Budget Payment Plan of £300 a week for 13 weeks. That builds £3,900 by the end of January, covering the £3,800 bill with £100 to spare. The first Direct Debit takes five working days, so she starts it in good time.

From February she switches to £400 a month for six months, which covers the £2,400 due on 31 July 2027. She saves the council fees separately. Her 2025/26 qualifying income was £36,000, above the £30,000 threshold, so she must start MTD quarterly updates from 6 April 2027. Her payment dates still stay the same.

Common mistakes when paying Self Assessment online, and the penalty each triggers

• Treating a quarterly MTD estimate as a bill and paying the wrong amount: no penalty in itself, but a shortfall at 31 January attracts interest and late payment penalties.
• Forgetting the first payment on account in January: the unpaid part attracts interest, then a 5% late payment penalty at 30 days.
• Using the wrong reference: GOV.UK warns the payment may be delayed or put against another bill, so interest can run until it is moved.
• Starting a first Direct Debit too late: it takes five working days, so a late start can miss the deadline and trigger interest.
• Reducing payments on account too far: HMRC charges interest on the difference if the final bill is higher.
• Filing the 2025/26 return late: a £100 penalty applies even if the tax is paid, rising after three months.
• Missing the tax check before licence renewal: the council cannot process your application without the code, which can stop you working.

Key terms

• UTR: Unique Taxpayer Reference, your 10-digit Self Assessment number. Add K for payments.
• POA: payment on account, an advance instalment towards the current year's bill, due 31 January and 31 July.
• Balancing payment: the difference between your final bill and the payments on account already made.
• MTD: Making Tax Digital for Income Tax, quarterly digital reporting through software.
• Budget Payment Plan: weekly or monthly Direct Debits towards your next bill, paid in advance.
• Time to Pay: an HMRC instalment arrangement for tax you cannot pay on time.
• PHV: private hire vehicle, the licence type used for ride-hailing app work.

How UK Driver Accountants helps

We work only with drivers, on fixed fees from £20 a month. We file your return early, show you the exact January and July figures, set up a sensible savings plan and handle MTD sign-up if you cross the threshold. We are independent of every ride-hailing platform. See our personal tax service, our fixed-fee pricing and our Liverpool driver accountancy page.

Next steps

Paying Self Assessment online in 2026 is about planning rather than new buttons. Know your 31 January 2027 total now, decide how to build it up, and keep 31 July 2027 in view. If you would like a driver-only accountant to work out the numbers for you, contact our team today.

Last reviewed 28 October 2026 by the UK Driver Accountants tax team.

This article is general information and is not personal tax advice. Speak to a qualified accountant about your own circumstances. If HMRC disputes your figures or charges a penalty, professional representation is recommended.