Self Assessment Tax Return 2027: A Nottingham Driver's Calendar for the Year Ahead

Your self assessment tax return 2027 deadline is 31 January 2027. By then you file your 2025/26 return online and pay two amounts together: the balancing payment for 2025/26 and the first payment on account for 2026/27. The second payment on account follows on 31 July 2027.

For a Nottingham private hire or hackney carriage driver, 2027 brings more than one bill. Making Tax Digital for Income Tax starts in April 2027 for anyone whose 2025/26 gross driving income was over £30,000. Budget 2026 also announced a higher rate for business miles above 10,000. This guide sets the year out month by month, shows a worked set of bills, and separates confirmed 2027/28 figures from announced ones.

It sticks to dates, cash flow and planning. If you want the detail on which council fees you can claim, our Nottingham licensing costs guide covers that, and the Nottingham drivers page explains how we support local drivers.

Key takeaways

• 31 January 2027 is the heaviest date: file the 2025/26 return, pay any balancing payment and pay the first 2026/27 payment on account in one go.
• 31 July 2027 brings the second payment on account, normally half of your 2025/26 tax bill.
• If your 2025/26 gross driving income was over £30,000, Making Tax Digital starts on 6 April 2027 and your first quarterly update is due by 7 August 2027.
• Budget 2026 keeps the personal allowance at £12,570 for 2027/28 and announced 35p a mile above 10,000 business miles from 6 April 2027, still subject to secondary legislation.
• If your 2026/27 earnings fall, you can ask HMRC to reduce your payments on account online or with form SA303.

What is a self assessment tax return in 2027?

In 2027, a self assessment tax return means the 2025/26 return (6 April 2025 to 5 April 2026) that you file online by 31 January 2027. It reports your driving income and expenses, and HMRC uses it to set your tax bill and your payments on account for 2026/27.

The self assessment tax return 2027 deadline does not cover 2026/27. That return covers the tax year ending 5 April 2027 and is due by 31 January 2028. Mixing the two up is one of the easiest ways to believe you have more time than you really do.

The 2025/26 return also does a second job in 2027. HMRC reads the gross income on it to decide whether you must use Making Tax Digital from April 2027. So the figures you enter in January shape both your cash flow and your record-keeping for the next tax year.

What do you have to pay in January 2027?

By 31 January 2027 you file your 2025/26 return and pay the balancing payment for 2025/26 plus the first payment on account for 2026/27. According to HMRC's guidance on payments on account, each instalment is half of the tax you owed for the previous year.

Payments on account apply unless your last bill was under £1,000, or more than 80% of your tax was collected at source, for example through a PAYE tax code. Most full-time drivers have no tax taken at source. Once the bill passes £1,000, they pay in three chunks: January, July, then a balancing payment the next January.

The balancing payment is your total 2025/26 tax minus the payments on account you already made for that year. If 2025/26 was your first year with a bill over £1,000, you made none. January 2027 then carries the full 2025/26 bill plus half of it again, and that jump catches out many second-year drivers.

Payments on account are estimates, not extra tax. If your 2026/27 tax ends up lower than the two instalments, the difference comes back to you or reduces your next bill. If it ends up higher, you pay the gap as a balancing payment on 31 January 2028.

Self assessment tax return 2027 calendar for Nottingham drivers

The table below lists every self assessment tax return 2027 date a self-employed driver is likely to meet, plus the January 2028 deadline it leads into. Making Tax Digital rows only apply if you are in that service; the quarterly deadlines come from HMRC's standard update periods.

Notice how quiet the spring is for most drivers. Between February and July nothing is due to HMRC, and Making Tax Digital quarterly updates move no money either. That gap is the best time to rebuild your tax pot after January and to check whether July's instalment looks right.

For the wider, all-year list that covers VAT and limited company dates too, see our key tax dates for drivers. This page stays with the 2027 Self Assessment cycle.

Which 2027/28 figures are confirmed, and which are not?

Most headline 2027/28 figures are now published. HMRC's Budget 2026 rates and allowances annex shows the personal allowance staying at £12,570 and Class 4 National Insurance staying at 6% and 2%. The new mileage rate and the larger trading allowance are announced but still need legislation.

The personal allowance has been frozen for several years. A GOV.UK policy paper from the November 2025 Budget set out plans to keep the allowance at £12,570, and the basic rate limit at £37,700, until 5 April 2031. In plain terms, any growth in your profit is taxed from the same starting point each year.

HMRC's Budget 2026 overview of tax legislation and rates also lists the 35p mileage change and the £3,000 trading allowance. The trading allowance helps part-time drivers with very low costs, since you use it instead of claiming expenses. A full-time driver with real mileage and running costs will usually be better off claiming those costs.

Two longer-range items in the same document are worth noting, both still subject to detail. From April 2029 the government plans more regular in-year payments for people who make payments on account. From 2 January 2028, taxi and private hire trips booked through an agent above a turnover threshold, still under consultation, will be treated for VAT as supplied by the agent rather than the driver. Neither changes your 2027 calendar.

How will the April 2027 mileage change affect a Nottingham driver?

If the announced change goes through, business miles above 10,000 in 2027/28 will be claimed at 35p instead of 25p, while the first 10,000 stay at 55p. A driver logging 25,000 business miles would claim £1,500 more in expenses. That lowers taxable profit; it does not cut tax pound for pound.

For 2026/27 you already use the higher first-band rate. According to HMRC's guidance on simplified expenses for vehicles, cars and goods vehicles get 55p a mile for the first 10,000 business miles from 6 April 2026, then 25p. Before 6 April 2026 the first-band rate was 45p, so your 2025/26 return still uses 45p.

This matters for planning. A Nottingham driver who covers the same miles in 2026/27 as in 2025/26 will usually show more expenses and a lower profit, purely because of the 55p rate. That can make your 2026/27 payments on account too high, which leads straight into the next section.

The budget measure also covers the matching rate used for employees and company directors. If you run your driving through a limited company, ask how it affects mileage you claim from the company. For the general Nottingham mileage rules, see our Nottingham mileage allowance guide.

Does Making Tax Digital start for you in April 2027?

It does if your qualifying income for 2025/26 was over £30,000. Qualifying income is gross self-employment and property income before expenses, so a driver with £34,000 of fares and a £20,000 profit is in scope. HMRC's Making Tax Digital eligibility guidance lists the threshold for each year.

The thresholds step down each year: over £50,000 from April 2026 (based on 2024/25), over £30,000 from April 2027 (based on 2025/26) and over £20,000 from April 2028 (based on 2026/27). If you join in April 2027, your first quarterly update covers 6 April to 5 July 2027 and is due by 7 August 2027.

Budget 2026 brought one easement. HMRC's overview says that for 2027/28, late submission penalty points will not be applied to quarterly updates for people who must join in April 2027. You still need to send the updates before you can file your return, so treat the easement as breathing room, not permission to skip.

We have a separate step-by-step Making Tax Digital guide for April 2027 covering software and sign-up, so we will not repeat it here. If you want to see what else changed this tax year, our 2026/27 Self Assessment changes for drivers explains it.

How do you reduce payments on account if your 2026/27 earnings fall?

Ask HMRC to lower them when you expect your 2026/27 bill to be smaller than your 2025/26 one. In your HMRC online account, select your latest return and choose 'Reduce payments on account', or post form SA303. Either way, you must state the amount of tax you expect to owe.

Typical reasons for a Nottingham driver include weeks off the road after an accident or illness, a switch to part-time hours, or the move from 45p to 55p a mile pushing up expenses. A reduction keeps cash in your account when you need it, rather than with HMRC until the following January.

There is a catch. HMRC's guidance says you will be charged interest on the shortfall if your final bill turns out higher than you expected. Cutting to zero on a hunch is a poor trade. Use your records to make a realistic estimate.

1. Total your 2026/27 fares, tips and other driving income received so far, then estimate the rest of the year to 5 April 2027 from your recent weekly average.
2. Add up your business miles and apply 55p for the first 10,000 and 25p after that, then add the costs the mileage rate does not cover, such as operator commission, phone and your driver licence.
3. Take costs from income to get an estimated profit, then work out Income Tax at 20% above £12,570 and Class 4 National Insurance at 6% on profit between £12,570 and £50,270. Our driver tax calculator speeds this up.
4. Halve the estimated 2026/27 bill. That figure is your new payment on account for January and July 2027.
5. Sign in to your HMRC online account, open your latest Self Assessment return and choose 'Reduce payments on account', or complete form SA303 and post it to HMRC.
6. Save a short note of how you reached the figure, with your mileage log and income totals, in case HMRC asks later.
7. Check again in spring 2027. If your earnings recover, pay extra voluntarily before 31 January 2028 to limit interest on any shortfall.

Illustrative example: one Nottingham driver's 2027 bills

This illustrative example uses an invented driver, Sam, who holds a private hire licence in Nottingham and works as a sole trader. The figures are made up to show how the dates link together. They are not a forecast for any real driver.

In 2025/26 Sam took £38,000 in gross fares and drove 20,000 business miles. At the 2025/26 rates, mileage comes to £7,000 (10,000 at 45p plus 10,000 at 25p). Other allowable costs, such as operator commission, phone, cleaning and the driver licence renewal, total £6,000. That leaves a profit of £25,000.

• Income Tax: (£25,000 minus £12,570) × 20% = £2,486.00
• Class 4 National Insurance: £12,430 × 6% = £745.80
• Total 2025/26 bill: £3,231.80
• Payments on account already made for 2025/26 (from his 2024/25 bill): 2 × £1,200 = £2,400
• 31 January 2027: balancing payment £831.80 plus first 2026/27 payment on account £1,615.90 = £2,447.70
• 31 July 2027: second 2026/27 payment on account = £1,615.90

Now suppose Sam lost eight weeks of work in 2026/27 while his car was off the road, and the 55p rate raised his mileage claim. His records point to a 2026/27 profit of about £19,000. That gives Income Tax of £1,286.00 and Class 4 of £385.80, so an estimated bill of £1,671.80.

If Sam asks HMRC to reduce his payments on account before January, each instalment falls to £835.90. His 31 January 2027 payment becomes £1,667.70 instead of £2,447.70, and July drops to £835.90. If his 2026/27 profit lands as estimated, there is nothing more to pay for that year in January 2028.

There is one more twist. Sam's 2025/26 gross fares of £38,000 are over £30,000, so he must use Making Tax Digital from 6 April 2027, even though 2026/27 was a quieter year. If he then drives 22,000 business miles in 2027/28, the announced 35p rate would give him £9,700 in mileage (£5,500 plus £4,200) instead of £8,500, saving about £312 in tax and Class 4 at his rates.

Where do Nottingham licence renewals fit in your 2027 plan?

Licence fees are business costs you record in the tax year you pay them, under the cash basis most sole traders use. Nottingham City Council's taxi licensing fees list a one-year driver licence at £148 and a three-year licence at £260, so the renewal date decides which return the cost lands in.

The same page lists a vehicle licence at £210 for a year, a vehicle MOT at £75 and a medical at £75. The page carries no date, so check the current fee before you renew. Mark your own renewal months on the 2027 calendar so you can budget for them alongside July's payment on account.

Some vehicle-related fees may already be covered by the mileage rate, while driver-related costs are usually claimed separately. The Nottingham licensing costs guide linked at the top of this page goes through each fee and how it sits alongside mileage, so we keep this section to timing.

Common mistakes in 2027 and the penalty each triggers

• Paying only the 2025/26 balancing payment and forgetting the first payment on account. Interest runs on the unpaid instalment from 1 February 2027.
• Filing the 2025/26 return after 31 January 2027. According to HMRC's guidance on Self Assessment penalties, you get an initial £100 penalty, then £10 a day after three months up to £900, then 5% of the tax due or £300, whichever is greater, at six and 12 months.
• Paying the balancing payment late. GOV.UK lists late payment penalties of 5% of the unpaid tax at 30 days, six months and 12 months, on top of interest.
• Reducing payments on account to nil without evidence. If the final bill is higher, HMRC charges interest on the shortfall from the original due dates.
• Using the announced 35p rate on 2026/27 miles. The change is due from 6 April 2027, so an earlier claim would make the return inaccurate and could lead to a penalty for a careless error.
• Ignoring the 7 August 2027 Making Tax Digital deadline because of the easement. Penalty points are not applied in 2027/28, but you cannot file your return without the quarterly updates.
• Missing the 5 October 2027 registration date if you started driving in 2026/27. GOV.UK warns that telling HMRC late could lead to a penalty.

Key terms

• Payment on account (POA): an advance towards next year's tax, normally half of last year's bill, due on 31 January and 31 July.
• Balancing payment: the tax still owed for a year after taking off the payments on account, due on the next 31 January.
• Qualifying income: your gross self-employment and property income before expenses, used to test whether Making Tax Digital applies.
• Making Tax Digital (MTD) for Income Tax: HMRC's system of digital records and quarterly updates through compatible software.
• Unique Taxpayer Reference (UTR): the 10-digit number HMRC issues when you register for Self Assessment.
• SA303: HMRC's paper form for asking to reduce payments on account.
• Class 4 National Insurance contributions (NIC): National Insurance charged on self-employed profits, at 6% and 2% for 2026/27.
• Private hire vehicle (PHV): a vehicle licensed by the council for pre-booked journeys, as opposed to a hackney carriage that can be hailed.

How UK Driver Accountants helps

UK Driver Accountants works only with drivers and is independent of any ride-hailing app. Our personal tax service prepares and files your 2025/26 return, checks whether your payments on account should be reduced, and sets up the records you need for Making Tax Digital from April 2027. Fees are fixed, from £20 a month, and you can see every plan on our pricing page.

Plan 2027 now, not on 30 January

Your self assessment tax return 2027 calendar is predictable once you see it laid out. Know your 31 January figure by December, decide on payments on account before you pay, and put 6 April and 7 August in your diary if you are over £30,000. If you would like a driver-focused accountant to run the numbers with you, contact our team and we will map your 2027 dates against your own figures.

Last reviewed 12 November 2026 by the UK Driver Accountants tax team.

This article is general information, not personal tax advice. Tax rules change and your own circumstances matter, so speak to a qualified accountant before acting. If you face an HMRC enquiry, dispute or penalty, we recommend professional representation.