Self-employed taxi and private hire drivers who make Payments on Account will move to a new payment timetable from April 2029. The amount of Self Assessment tax they owe does not change. In the transition year, 2029 to 2030, they still make the final payment for the previous tax year while the new payments start.
What is changing
A government factsheet, updated on 28 October 2026, sets out the reform. Around 12 million people file a Self Assessment return each year, and around 3 million of them make Payments on Account. Those are two payments a year, each usually half of the previous year's tax bill. The first is due in January, 10 months into the tax year it relates to, and the second in July, four months after that tax year ends. If the two payments do not cover the bill, a balancing payment is due by 31 January, with the tax return. In some cases the tax is not paid until 22 months after the income was earned.
From April 2029 the same taxpayers will make smaller, more regular payments during the tax year in which the income is earned. The government has not decided how often the payments will be taken. They will be automated, for example by Direct Debit. A driver with enough PAYE income from employment or a private pension will be able to choose to pay through PAYE. The payments will still be based on tax owed the year before, and can be updated online if circumstances change. The tax return is still due by 31 January.
The Payments on Account system is now 30 years old. Further detail is due in 2027, with guidance, tools and payment plans. Drivers who are affected have more than two years to prepare. Anyone in financial difficulty is asked to contact HM Revenue and Customs early.
Who must pay
Payments on Account are not required if the tax owed last year was less than £1,000, or if more than 80 per cent of that tax was paid outside Self Assessment, for example through a tax code. The Self Assessment statement, or the online account, shows the amounts where they apply.
The transition
The Chartered Institute of Taxation said overlapping the old and new systems could squeeze cash flow in the transition, and that people with seasonal or unpredictable earnings could pay tax before the income arrives. Among the points still open are how often payments are made, how easily an estimate can be changed, and the safeguards for people in financial difficulty, or who are vulnerable or digitally excluded.