Making Tax Digital for taxi drivers is now in force

MTD Software for Taxi Drivers

From 6 April 2026, eligible self-employed taxi and private hire drivers must move to digital record keeping and quarterly updates under HMRC’s Making Tax Digital rules.

TaxiManager helps you stay organised and compliant. HMRC may apply penalty points and financial penalties if records slip or deadlines are missed — and failing to keep the required digital records in functionally compatible software can attract penalties of up to £3,000 per quarterly period in some cases. Always confirm current rules with HMRC or your accountant.

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TaxiManager MTD software for self-employed taxi and private hire drivers
HMRC compliant record keeping
Quarterly digital updates
Serious HMRC penalty exposure
PRO MTD filing support

Why compliance matters now

This is the biggest change to self-employed tax reporting in years.

Even though HMRC is applying a soft-landing period for late quarterly submissions during the first tax year, the legal obligation to keep digital records and submit updates still applies.

HMRC may impose penalty points and financial penalties if you miss obligations. In particular, failing to maintain the required digital records — or to preserve them in functionally compatible software — can lead to penalties of up to £3,000 per quarterly period. Late tax payments and late final reporting can also attract penalties and interest.

The first year should be treated as your compliance transition window, not as a reason to delay.

Who needs to use MTD?

Who needs to use Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is being introduced in phases:

  • from 6 April 2026 if your qualifying income is over £50,000
  • from 6 April 2027 if your qualifying income is over £30,000
  • from 6 April 2028 if your qualifying income is over £20,000

Important: the threshold is based on qualifying income rules set by HMRC, and eligibility should be checked against HMRC guidance.

What changes under MTD?

What changes for taxi drivers under MTD?

Under MTD for Income Tax, eligible self-employed drivers must:

  • keep digital records of income and expenses
  • send quarterly updates through compatible software
  • complete their final tax process through software-supported filing

Working with an accountant? Many practices need your books complete shortly after each quarter ends so they can submit on time — for example by the 10th day after the quarter end (30 June → 10 July; 30 September → 10 October; 31 December → 10 January; 31 March → 10 April). Confirm the dates your own adviser uses.

Why TaxiManager

Why TaxiManager for MTD?

TaxiManager is built around the day-to-day reality of self-employed taxi and private hire drivers.

With TaxiManager you can:

  • record income and expenses throughout the year
  • keep your records in one place
  • stay organised for quarterly reporting
  • avoid last-minute catch-up
  • give your accountant cleaner records
  • choose PRO MTD if you want submissions handled for you

Waiting until the deadline creates risk

Leaving this until the last minute often leads to:

  • missing expense records
  • incomplete quarterly updates
  • incorrect profit figures
  • rushed year-end submissions
  • avoidable late payment charges
  • Up to £3,000 per quarter in some record-keeping cases if required digital records are not kept or not held in compatible software (HMRC rules)

The cost of poor records is often far higher than the cost of getting compliant early — HMRC exposure is not limited to small fixed fines.

How TaxiManager helps you stay ready

  1. Record weekly or regular entries
    Keep income and expenses up to date during the year.
  2. Stay ready for quarterly reporting
    Your records are already organised when quarterly deadlines come around.
  3. Submit with confidence
    Choose the route that suits you, including PRO MTD support if you want help with submissions.

FAQ

Do all taxi drivers need to use MTD from April 2026?
No. The first mandatory phase starts from 6 April 2026 for eligible sole traders and landlords with qualifying income over £50,000.
Will the threshold stay at £50,000?
No. HMRC says the threshold reduces to £30,000 from 6 April 2027 and to £20,000 from 6 April 2028.
Do I need digital records?
Yes. MTD requires digital record keeping using compatible software.
Do I need to send updates every quarter?
Yes. HMRC says quarterly updates are sent every 3 months through compatible software.
What penalties can HMRC impose under MTD?
HMRC can apply penalty points and financial penalties if you miss submission deadlines or fail to keep proper digital records. Failing to maintain required records, or to preserve them in functionally compatible software, may attract penalties of up to £3,000 per quarterly period in some circumstances. Rules and amounts can change — check current HMRC guidance and your accountant.
Can I wait until the last minute?
You can, but quarterly cycles are much faster than a single year-end return. Last-minute entries increase the risk of errors, missed deadlines, and HMRC penalties — including record-keeping charges that can run to thousands of pounds per quarter in serious cases.

Stay compliant before penalties
fully apply

The first year gives drivers time to get their process right.

Use that window now.

Keep your records digital, stay ready for quarterly deadlines, and move into HMRC compliance with confidence.

Start your 14-day free trial Choose PRO MTD filing support