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If you drive a taxi or work through Uber, Bolt or a local private-hire circuit, your “books” are probably a glovebox full of receipts and a banking app. That works right up until Making Tax Digital (MTD) for Income Tax arrives — at which point HMRC will expect your income and expenses in digital, quarterly form. The good news: the right software turns that from a chore into a two-minute weekly habit.
What taxi drivers actually need from software
You don’t need a finance degree or a 40-feature accounting suite. For a self-employed driver, the essentials are:
- Bank feed — connects to the account your fares land in, so income is pulled in automatically.
- Easy expense capture — snap a photo of a fuel or repair receipt from your phone and it’s logged.
- Mileage tracking — either automatic GPS logging or a simple manual entry, because mileage is one of your biggest claims.
- MTD for Income Tax compatibility — it must be on HMRC’s recognised list so it can file your quarterly updates.
- A dashboard you’ll actually open — if it’s clunky, you won’t use it, and un-used software is worse than a spreadsheet.
The realistic options
Most drivers do well with one of the mainstream MTD-ready packages — FreeAgent, QuickBooks or Xero — all of which handle sole-trader income, expenses and MTD filing. FreeAgent is often free if you bank with certain providers; QuickBooks and Xero have low-cost self-employed tiers. A simple spreadsheet is fine today, but it won’t be MTD-compliant on its own once the rules bite, so it’s worth moving across early.
Confused by the new MTD rules?
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Get a Free Compliance CheckThe trap drivers fall into is buying powerful software and never configuring it for how a taxi business actually works — commission from apps, cash fares, vehicle finance and fuel. That’s where having an accountant set it up once, correctly, pays for itself many times over.
Don’t forget the mileage-vs-actual-costs decision
Whichever tool you pick, it needs to support how you claim vehicle costs. You can either claim simplified mileage (a flat rate per business mile) or a share of your actual running costs (fuel, insurance, servicing, depreciation) — but not both for the same vehicle. Good software lets you record either cleanly so you (or your accountant) can pick whichever leaves you better off.
Keep it simple, keep it consistent
The “best” software is the one you keep on top of. Ten minutes a week beats a panicked weekend before each quarterly deadline. Set up the bank feed, photograph receipts as you get them, and log your mileage the same day.
Related reading: Best MTD-Compatible Software for UK Businesses (2026 Guide)
Get taxi-driver accounts sorted — before MTD hits
Tax Digital helps taxi and private-hire drivers across Norwich, Norfolk and the wider UK keep clean digital records, claim every allowable expense and stay ready for Making Tax Digital for Income Tax. Fixed monthly pricing, no jargon, real people.
Talk to us about taxi-driver accounting or see our accounting for taxi drivers page.
This article is general information, not personal tax advice. Figures reflect the 2025/26 tax year and can change — check your own position with us or HMRC before acting.
