Making Tax Digital (MTD) for Income Tax changes how many self-employed drivers report to HMRC. Instead of one return a year, you keep digital records and send quarterly updates. Here's what it means for you.
Who has to join, and when
It depends on your 'qualifying income': your total takings (turnover, not profit) from self-employment and property, before expenses.
- From 6 April 2026: qualifying income over £50,000
- From 6 April 2027: qualifying income over £30,000
- From 6 April 2028: qualifying income over £20,000
Turnover, not profit
This catches many drivers out. If you take £35,000 in fares but your profit after fuel, commission and other costs is only £18,000, it's the £35,000 that counts. That driver would join from April 2027.
HMRC uses the figures from your earlier tax returns to decide when you must start, and should write to you.
What you'll have to do
- Keep your income and expense records digitally
- Send a quarterly update to HMRC using MTD-compatible software
- Quarterly updates are due by 7 August, 7 November, 7 February and 7 May
- Submit a final declaration by 31 January after the tax year ends
Penalties
MTD uses a points system for late submissions. Each missed deadline earns a point, and once you reach the limit a £200 penalty applies. Paying late brings separate penalties and interest.
How to get ready now
The hardest part of MTD is having tidy records every quarter instead of a shoebox once a year. Start logging fares, expenses and mileage as you go, and keep receipt photos with each entry.
FareTaxMate keeps your figures organised and up to date all year. It does not file to HMRC itself and is not MTD submission software, so you'll still need HMRC-recognised software or an accountant to send your updates. Your FareTaxMate figures make that quick.
General information only, not tax advice. Rules can change – check GOV.UK or an accountant for your situation.