Self-employed taxi drivers turning over more than £50,000 face new digital tax reporting rules from April 2026
- Perry Richardson
- 1 hour ago
- 2 min read
Self-employed taxi drivers turning over more than £50,000 a year must prepare for new digital tax rules set to begin on 6 April 2026. Under the changes, drivers will be required to keep digital records and submit quarterly updates to HM Revenue and Customs (HMRC) as part of the Making Tax Digital (MTD) for Income Tax programme.
The new system aims to spread the workload of tax reporting more evenly throughout the year, reducing the pressure that builds up at tax return time. Drivers will need to use compatible software to log their income and expenses and submit this data every three months.
HMRC has said the move to digital reporting will help reduce mistakes and make it easier to stay on top of finances. It is expected to save time overall by cutting down on the annual rush to complete self-assessment forms.
Qualifying income includes all gross income from self-employment and property rental before any deductions. The threshold for MTD will fall to £30,000 from April 2027 and then again to £20,000 from April 2028, bringing more self-employed workers, including many taxi drivers, into the system.
Taxi drivers who want to get ahead of the change can sign up for the testing phase now through GOV.UK. No penalties will apply during the testing period, allowing participants to get used to the new process without risk.
The government says drivers who take part in early testing will be better prepared for the shift, much like the transition seen when MTD was introduced for VAT-registered businesses.
James Murray MP, Exchequer Secretary to the Treasury, said: "MTD for Income Tax is an essential part of our plan to transform the UK's tax system into one that supports economic growth.
“By modernising how people manage their tax, we're helping businesses work more efficiently and productively while ensuring everyone pays their fair share.
“This is a crucial step in this government's decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.”
Craig Ogilvie, HMRC’s Director of Making Tax Digital, said: "MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax.
"By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.”
