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Making Tax Digital (MTD) for Income Tax is the biggest change to self-employed tax in a generation, and taxi and private-hire drivers are squarely in scope. If you’re self-employed behind the wheel, here’s what it actually means — without the jargon.
What is MTD for Income Tax?
Instead of one Self Assessment tax return a year, MTD for Income Tax asks you to:
- Keep your income and expense records digitally (in software, not just on paper).
- Send HMRC a quarterly summary of your income and expenses.
- Submit a final declaration after the tax year to confirm the full picture and settle your bill.
Does it apply to you, and when?
MTD for Income Tax is being phased in by income level. It begins with sole traders and landlords whose qualifying income is above £50,000 from April 2026, extends to those above £30,000 from April 2027, and a £20,000 threshold has been announced to follow. “Qualifying income” is your gross self-employed and property income before expenses — so it’s your total fares and app earnings, not your profit. Many full-time drivers will cross the threshold, so it pays to check your numbers now rather than assume you’re under.
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Get a Free Compliance CheckWhat you’ll need
- Compatible software on HMRC’s recognised list (a spreadsheet alone won’t cut it).
- Digital records kept through the year, not reconstructed at the end.
- A quarterly routine — which is far easier if you’re already recording weekly.
Why starting early is the smart move
Drivers who wait until the deadline face two problems at once: learning new software and catching up months of records under time pressure. Drivers who move now get the habit bedded in while the stakes are low. If you switch to digital record-keeping this year, MTD becomes a non-event.
How Tax Digital helps drivers get ready
We set the software up around how a taxi business really runs — cash and card fares, app commission, fuel and vehicle costs — get your records flowing, and handle the quarterly submissions so you can concentrate on driving. It is exactly the kind of change that’s stressful alone and simple with the right accountant.
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.
