Making Tax Digital for Taxi Drivers in the UK: 2026/27 Guide
Making Tax Digital for Income Tax is now live. If you're a self-employed taxi or private hire driver with takings over £50,000 a year, you've been in it since April 2026. If you take over £30,000, you join in April 2027.
The good news? It changes how you report your tax, not how much you pay. Here's what it means for you, in plain English.
What is Making Tax Digital?
Making Tax Digital (MTD) is HMRC's new way of doing Self Assessment for the self-employed. Instead of one tax return a year, you:
- keep your records digitally, in HMRC-recognised software
- send a short update to HMRC every three months
- send a final declaration at the end of the tax year
The quarterly updates are just totals of your income and expenses. You are not paying tax four times a year.
Does it apply to me?
It depends on your qualifying income. That's your total takings from self-employment, plus any rental income, before expenses. So if you took £52,000 in fares but spent £20,000 on fuel, rent and insurance, your qualifying income is still £52,000.
- Over £50,000 on your 2024/25 tax return: you started on 6 April 2026.
- Over £30,000 on your 2025/26 tax return: you start on 6 April 2027.
- Over £20,000 on your 2026/27 tax return: you start on 6 April 2028.
If you're under £20,000, you carry on with normal Self Assessment for now. Some people can apply for an exemption, for example if they genuinely can't use a computer or the internet. Check GOV.UK if you think that's you.
The deadlines for 2026/27
Each quarterly update is due a month and a week after the quarter ends:
- 6 April to 5 July 2026: due by 7 August 2026
- 6 July to 5 October 2026: due by 7 November 2026
- 6 October 2026 to 5 January 2027: due by 7 February 2027
- 6 January to 5 April 2027: due by 7 May 2027
Your final declaration for the year, and any tax you owe, are still due by 31 January, the same as now.
What about penalties?
HMRC has said it won't give penalty points for late quarterly updates during 2026/27, the first year. Normal penalties for a late tax return or late payment still apply.
From April 2027, a points system starts. You get a point for each missed deadline. Reach four points and you get a £200 fine. Don't rely on the grace period: get into the habit now.
What you need to do
1. Choose your software
You need software that is recognised by HMRC for MTD. There are free and paid options, and many apps used by accountants already work. If you prefer spreadsheets, you can keep them, but you'll need "bridging" software to send the figures to HMRC.
2. Keep records as you go
Log every fare and every cost each week, not in a panic the night before the deadline. That includes app earnings, account work, cash fares and tips, and costs like fuel, car rent or finance, insurance, licence fees, phone and cleaning.
You can track your earnings and expenses for free with the UK Driver Hub Earnings and Expenses tracker. Upload receipt photos as you go and export everything for your accountant or software.
3. Sign up with HMRC
If MTD applies to you, sign up through GOV.UK or ask your accountant to do it for you. Search "sign up for Making Tax Digital for Income Tax" on GOV.UK.
4. Decide whether you want help
Plenty of drivers with straightforward takings do it themselves. If you'd rather hand it over, an accountant can send your quarterly updates and final declaration for you. We've teamed up with an accountant who does this for drivers: see MTD sorted for £29 a month.
Common questions
I work for Uber and a local firm. Do I add them together?
Yes. All your self-employed takings count towards the threshold, from every app, firm and cash job.
Do I still need to do a tax return?
The final declaration replaces your old Self Assessment tax return. It's due by 31 January, as before.
I'm a new driver. When do I join?
It depends on the takings shown on your tax returns. If your first full year is over the threshold, you'll usually join from the April after you file that return.
The bottom line
Making Tax Digital is here, and it's not going away. The drivers who find it easy are the ones who keep their records up to date every week.
Get your software sorted, log your fares and costs as you go, and put the four quarterly deadlines in your diary.
This guide is general information, not tax advice. Rules can change, so check GOV.UK or speak to an accountant about your own situation. Last checked October 2026.