MTD IT for the self-employed on the road

If you earn your living behind the wheel, such as self-employed taxi driving, private vehicle hire or courier and delivery work, Making Tax Digital for Income Tax (MTD IT) is coming your way. This guide explains what’s changing, who it affects, and how to get ready without taking your focus off the road.

What is Making Tax Digital for Income Tax (MTD IT)?

MTD IT is HMRC’s new way of collecting tax information from self-employed people and landlords. Instead of a single big tax return each year, you’ll keep digital records and send updates during the year using recognised software.

In simple terms, you will need to:

  1. Keep your business records in a digital format
  2. Send four quarterly (year-to-date) updates to HMRC via recognised software
  3. Submit a final annual declaration to confirm your tax position

This keeps your tax information up to date and gives you a clearer view of what you’re likely to owe.

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Who needs to use MTD IT and when?

MTD IT starts in April 2026 and applies based on your qualifying income. This is your gross income before expenses.  It becomes mandatory for these income groups from these dates:

  • April 2026: Income over £50,000
  • April 2027: Income over £30,000
  • April 2028: Income over £20,000

Qualifying income includes:

  • Taxi, chauffeur, private hire and work booked through apps such as Uber, Bolt or Freenow
  • Delivery and courier work
  • Other self-employment income
  • Property income

For example, £48,000 from driving plus £5,000 property income is £53,000 qualifying income, so MTD IT applies from April 2026.

HMRC will use your 2024/25 Self-Assessment to confirm if you need to join, so checking your figures now is helpful.

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Can you sign up early?

Yes, and for many drivers it makes sense to do so. You can join before MTD IT becomes mandatory, either to prepare or to take part in HMRC’s pilot. TaxNav is HMRC-recognised software and already supports many drivers taking part.

Early sign-up lets you:

  • Get familiar with digital record-keeping
  • Test quarterly updates
  • Avoid the rush in 2026 and 2027
  • Build good habits before it becomes compulsory

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Do self-employed drivers have to register with HMRC?

Yes. If you’re self-employed, you must already be registered for Self-Assessment. Once your income meets the MTD IT threshold, you must register for MTD IT for your tax year start date and use MTD IT-recognised software, such as TaxNav, to send the required updates. If you’re unsure whether you’re correctly registered, check with HMRC.

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What digital record-keeping means in practice

You won’t need to upload every receipt, but you must keep accurate digital records to produce totals that can be submitted to HMRC through recognised software. These typically factor in:

  • Trip income or fares
  • Fuel, insurance, MOTs and repair costs
  • Vehicle finance or lease payments
  • Parking and toll charges
  • Mobile phone and data costs
  • Accountancy fees
  • Mileage claims (simplified expenses)

You can keep these records in spreadsheets or use software like TaxNav’s app, which lets you record income and expenses on the go. If you use spreadsheets, you will still need MTD IT-recognised software (such as TaxNav) to link them to HMRC’s portal.

TaxNav provides a simple bridging option to your existing spreadsheet, so there is no need to start from scratch, just continue with your existing methods and TaxNav will do the rest.

HMRC will not provide free software, so choose your digital setup early. Keeping records up to date also reduces end-of-year stress.

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What quarterly reporting looks like

With MTD IT, you will send HMRC four quarterly updates each tax year showing your income and expenses to date. These cover:

  • Driving and business income
  • Running costs and expenses
  • Any other qualifying income

Even in a quiet quarter, you still need to submit an update. Good digital records make this straightforward and help you track your estimated tax bill as the year progresses.

This does not mean paying tax quarterly. You will still pay in the usual way after your final year-end declaration. Quarterly updates do not trigger tax bills, but your software will help you keep track so there are no surprises in January.

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Why the final annual declaration still matters

At the end of the tax year, you will submit a final annual declaration by 31 January. This replaces the Self-Assessment tax return and confirms:

  • All your income reported during the year
  • Any additional income outside of driving
  • Your allowable expenses and reliefs
  • Your final tax position

You must complete all four updates before submitting the final declaration. If you keep updates on schedule, January becomes a straightforward confirmation.

A note on penalties - MTD IT begins in April 2026. You won’t be penalised for late or incorrect quarterly updates in the first year, but you must still submit all four before filing your 2026/27 tax return. That return is still subject to penalties if it is late. Preparing early helps avoid several submissions building up in January 2028.

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How to get your driving business MTD IT-ready

Preparing gradually works best. A good starting point is to:

  1. Check your 2024/25 income
  2. Look out for HMRC’s letters confirming your start date
  3. Choose MTD IT-recognised software such as TaxNav
  4. Register for MTD IT in good time
  5. Ensure your accountant (if you have one) has the right authorisation
  6. Consider joining the HMRC pilot to get used to the system

If you use spreadsheets, software like TaxNav lets you keep them while staying compliant.

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Meet your MTD IT requirements with TaxNav

TaxNav is designed for the self-employed, including those working on the road. It makes MTD IT straightforward without adding extra admin.

With TaxNav you can:

  • Keep accurate digital records on the go
  • Submit quarterly updates securely
  • Track your estimated tax bill
  • Complete your final declaration with confidence
  • Use spreadsheets or the mobile app

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"I’m liking the simplicity… well suited to other cabbies, particularly as some may not be too savvy with accounting."

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With the April 2026 deadline approaching, TaxNav is free to use for the remainder of the 2025/26 tax year, giving you time to practise before MTD IT becomes compulsory.

Find out more or join HMRC’s pilot programme with us today and stay focused on the road while your tax stays on track.

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