Making Tax Digital in April 2027: Step-by-Step HMRC Prep for Drivers Earning Over £30,000

Making Tax Digital April 2027 is the next step in HMRC's digital tax rollout, and it is the one most full-time drivers will feel. If your gross self-employment and property income for the 2025/26 tax year was over £30,000, you must keep digital records from 6 April 2027 and send HMRC a summary every quarter.

The deciding figure comes from the tax return you file by 31 January 2027, so the work starts now, not next spring. This guide gives you a month-by-month plan from November 2026 to your first quarterly update in August 2027. It also shows which number on your driver app statements is the one HMRC actually tests.

If you want the background on how quarterly reporting differs from the annual return, read our comparison of Self Assessment vs Making Tax Digital first. This article focuses on the drivers joining in the second wave and what they need to do, in order.

Key takeaways

• From 6 April 2027, Making Tax Digital (MTD) for Income Tax covers sole traders and landlords whose qualifying income for 2025/26 was over £30,000.
• Qualifying income is turnover before expenses. A driver with £31,000 of fares and £20,000 of profit is in.
• Your 2025/26 Self Assessment return, due by 31 January 2027, is the evidence HMRC uses.
• Digital records start on 6 April 2027 and the first quarterly update is due by 7 August 2027.
• Your 2026/27 tax return is still filed the usual way, by 31 January 2028.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is HMRC's system that requires sole traders and landlords above a turnover threshold to keep digital records in compatible software. They send quarterly summaries of income and expenses, then file their annual tax return through that software by 31 January after the tax year.

It does not create a new tax or change when you pay. GOV.UK's guidance on submitting your tax return under MTD says it will not change the way you pay tax or the dates that payments are due. What changes is how often you report and the tools you use to keep records.

Will I need to use Making Tax Digital in April 2027?

You will if your self-employment and property income for 2025/26, added together before expenses, was over £30,000 and you are not exempt. HMRC checks the 2025/26 return you file by 31 January 2027. If you were already over £50,000 on your 2024/25 return, you should have started in April 2026 instead.

According to GOV.UK's MTD for Income Tax eligibility guidance, the thresholds are set per tax year. Qualifying income over £50,000 for 2024/25 meant starting on 6 April 2026. Over £30,000 for 2025/26 means starting on 6 April 2027. Over £20,000 for 2026/27 means starting on 6 April 2028.

The bands are a ladder, not a single test. A driver at £26,000 for 2025/26 is not in the April 2027 wave, but if 2026/27 income goes over £20,000 they join a year later. Most full-time drivers will be in by April 2028 either way, so the question is really when, not whether.

Is the £30,000 based on my fares or my profit?

It is based on your gross income, not your profit. GOV.UK's page on working out your qualifying income describes it as the amount before expenses, also known as turnover. Fuel, insurance, mileage allowance and phone costs do not reduce it. They only reduce the profit you pay tax on.

This is where most drivers misjudge their position. A driver who takes home a modest profit can still have turnover well over £30,000, because running a car for a living is expensive. Look at the turnover box on your 2025/26 return, not the profit figure at the bottom of the calculation.

GOV.UK lists what counts. All self-employment income counts, and so does UK and overseas property income if you are UK tax resident. Wages taxed through PAYE, dividends, pensions and your share of partnership profit do not count. If you own a let property jointly, only your share counts.

Which figure on your driver app statement is turnover?

This is the gap most general MTD guides skip. Your turnover depends on who legally sells the journey. If your app operator acts as principal, it sells the trip to the passenger and pays you for your driving services, so your turnover is what it pays you, plus any charges it deducts from you.

If an operator acts as your agent, the passenger's contract is with you. Your turnover is then the full fare before commission, not the net payout that reaches your bank. We explain how to tell the two models apart in our guide to counting turnover when the operator is the principal. The same sort that settles your VAT position also settles your MTD position.

For drivers near the line, this choice can decide the answer. Counting passenger fares from a principal operator's statement can push you over £30,000 on paper when your true turnover is under it. Counting only bank receipts from an agent firm can do the opposite. Get this right on the 2025/26 return, because that return is what HMRC reads.

How does HMRC decide, and what letter should I expect?

HMRC reviews your Self Assessment return each year. GOV.UK says that if your qualifying income is over the threshold, HMRC will write to confirm you need to start by the next tax year. It also says you are still responsible for checking and signing up if no letter arrives, so do not wait for post.

For the April 2027 wave, the return in question is 2025/26. Many drivers file in the last fortnight of January, which leaves HMRC about nine weeks before 6 April 2027. GOV.UK has not published a date for when this wave's letters will be sent, so treat your own filed return as the trigger rather than the letter.

HMRC's sign-up guidance shows it is willing to act for people who do nothing. It says that from September 2026 HMRC started signing up people in the first wave who had not done so. If you receive a letter and think HMRC has the wrong figure, our HMRC support service can check it against your records and reply for you.

Making Tax Digital April 2027: month-by-month plan for drivers

This plan runs from today, November 2026, to your first quarterly update. It assumes a sole trader driver with an accounting period ending on 5 April. Each month has one main job, so the work stays manageable alongside your shifts.

November and December 2026: get the 2025/26 number right

Download every weekly or monthly statement from your driver app for 6 April 2025 to 5 April 2026. Add your private bookings, tips and any rent. Then decide, for each operator, whether you count the payment for your services or the full fare, as explained above.

Our tax calculator helps you estimate the bill on the profit, which you will pay on 31 January 2027 regardless of MTD. Keep the turnover and profit figures side by side, because the first decides MTD and the second decides tax.

January 2027: file the return that decides everything

File your 2025/26 return by 31 January 2027. A late return does not keep you out of MTD, and it brings late filing penalties of its own. If you need a reminder of the other dates around it, our key tax dates for drivers guide lists them in one place.

February and March 2027: software and sign-up

You choose a compatible product from the list of software on GOV.UK, because quarterly updates must be sent through HMRC-recognised software. Our guide to Self Assessment software for MTD explains what to look for, and our HMRC login and software authorisation guide walks through connecting it. Do both before April, while nothing is due.

April to August 2027: records, then the first update

From 6 April 2027 each income and expense record needs an amount, a date and a category. Weekly entry is easier than a quarterly scramble, especially with a mileage log to match. Our mileage log and records guide shows a layout that feeds straight into MTD software.

How do I sign up for Making Tax Digital step by step?

You sign up online through GOV.UK using your HMRC sign-in details, or an agent signs you up. You must be registered for Self Assessment and have filed a return in the last two years. Have your business details ready, choose 2027/28 as your start year, then connect compatible software to HMRC.

1. Confirm your 2025/26 qualifying income is over £30,000 using the turnover figure on the return you filed.
2. Check you can sign in to your HMRC online account, and recover your details now if you cannot.
3. Gather what GOV.UK asks for: your business name, business address, nature of trade and the details of each income source, including any you have stopped.
4. Sign up on GOV.UK, or authorise an agent to sign you up, and choose the 2027/28 tax year as your start year.
5. Choose compatible software and authorise it to talk to HMRC using your HMRC sign-in.
6. Decide between standard quarters (ending 5 July, 5 October, 5 January, 5 April) or calendar quarters if your accounting period ends on 31 March, before your first update.
7. Enter a trial month of real figures to test your categories and your mileage method.
8. From 6 April 2027, record every payout and cost digitally, then send the first update by 7 August 2027.

GOV.UK's guidance on creating digital records says the choice of calendar update periods cannot be changed after your first quarterly update. For most drivers, whose year already ends on 5 April, the standard quarters are simpler. If your self-employment turnover is below £90,000, GOV.UK also allows simpler categorisation: you only need to record whether each item is income or an expense.

What are the 2027/28 quarterly deadlines?

For standard quarters, the 2027/28 deadlines are 7 August 2027, 7 November 2027, 7 February 2028 and 7 May 2028. Each update is cumulative from 6 April. You then file the 2027/28 tax return through your software by 31 January 2029, and your 2026/27 return is still due by 31 January 2028 in the usual way.

According to GOV.UK's guidance on sending quarterly updates, the four periods run from 6 April to 5 July, 5 October, 5 January and 5 April. The updates contain category totals, not individual receipts. GOV.UK describes them as summaries, not extra tax returns.

So the 2027/28 cycle overlaps with your last old-style return. Between November 2027 and January 2028 you will send two quarterly updates and file a 2026/27 return. Plan that winter now, because it is the busiest admin period of the whole switch.

What penalties apply to drivers joining in 2027?

Late quarterly updates earn penalty points, and four points bring a £200 penalty, with £200 for each later miss. GOV.UK confirms no penalty points for late quarterly updates in 2026/27, but its current guidance does not describe the same relief for 2027/28. Plan to meet every deadline from the first one.

GOV.UK's penalties guidance for MTD for Income Tax says each missed deadline earns one point. Points below the threshold are removed 24 months after the missed deadline. It also sets out a late payment regime, with 4% charges at day 15 and day 30 for 2027/28 and a one-off 30-day grace period in your first year. Check GOV.UK for any change before your first quarter.

Illustrative example: a driver just over the line

This illustrative example uses an invented driver and our own round figures. It is not based on any real person or operator.

Tomasz drives full time in the East Midlands. His app operator acts as principal. For 2025/26 his statements show £27,400 paid to him for his driving services, with nothing deducted from him. He also earned £2,100 from airport runs he booked himself and £900 in tips.

• Qualifying income: £27,400 + £2,100 + £900 = £30,400, which is over £30,000.
• Mileage allowance: 18,000 business miles. The first 10,000 at the 2025/26 rate of 45p is £4,500, and 8,000 at 25p is £2,000, so £6,500 in total.
• Other allowable costs, such as his phone and licence fees: £1,100.
• Taxable profit: £30,400 − £6,500 − £1,100 = £22,800.

His profit is well under £30,000, but his turnover is £400 over it, so he joins MTD on 6 April 2027. Had he wrongly totalled the passenger fares on his statements, about £36,000, he would still be in, but his return would overstate his income. Had he left out his tips and private jobs, he would have shown £27,400 and under-declared.

Our view is that Tomasz should not chase the threshold. He files an accurate return in January, signs up in March and starts weekly records in April. The 55p rate that applies from 6 April 2026 changes his 2026/27 and 2027/28 profit, not the 2025/26 turnover test.

Common mistakes and what each one costs

• Testing profit instead of turnover: you assume you are out, miss sign-up and risk penalty points from the first missed quarter.
• Using bank receipts from an agent operator: turnover is understated, which can mean an inaccurate return and penalties for errors.
• Filing the 2025/26 return late: late filing penalties apply, and it does not delay MTD.
• Waiting for the HMRC letter: GOV.UK places the duty to check on you, and the letter may arrive weeks before 6 April 2027.
• Starting records in July: you then have three months of backlog to rebuild under deadline pressure.
• Forgetting the 2026/27 return: it is still due by 31 January 2028, alongside your second and third quarterly updates.

Can I be exempt from Making Tax Digital?

Some people can. GOV.UK says there are different reasons for exemption, and being digitally excluded, for example if you cannot reasonably use computers or the internet, is one of them. Some exemptions are automatic and others need an application. If you are exempt, you keep filing a normal Self Assessment return.

Not liking software is not a reason for exemption. If you are unsure whether your circumstances qualify, check the exemptions guidance linked from GOV.UK's eligibility page before April 2027, or ask us to review it. Our Making Tax Digital FAQ for drivers answers the general questions we hear most.

Key terms

• MTD: Making Tax Digital, HMRC's digital record-keeping and reporting system.
• Qualifying income: your self-employment and property income before expenses, taken from the previous year's return.
• Quarterly update: a cumulative summary of income and expense totals sent from software to HMRC.
• Principal: an operator that sells the journey to the passenger and pays you for your services.
• Agent: an operator that arranges bookings for you, leaving the full fare as your income.
• Compatible software: a product on GOV.UK's list that can keep records and send updates to HMRC.
• Penalty point: a mark for each missed MTD deadline. Four points trigger a £200 penalty.

How UK Driver Accountants helps

We are an accountancy practice that works only with drivers, on fixed fees from £20 a month, and we are independent of any ride-hailing app. Our Making Tax Digital service checks your 2025/26 turnover, files the return, signs you up and sends every quarterly update for you.

If HMRC writes about MTD and the figure looks wrong, our HMRC support checklist explains the first steps, and we can handle the reply. Our bookkeeping service keeps your weekly records up to date, and you can compare plans on our pricing page.

Start with the return, then the routine

Making Tax Digital April 2027 turns on one number: your 2025/26 turnover before expenses. Get it right on the return you file by 31 January 2027, sign up in the spring, start records on 6 April and send your first update by 7 August 2027.

If you think you are close to £30,000, or you are not sure which statement figure is your turnover, contact our team for a fixed-fee review before you file.

Last reviewed 11 November 2026 by the UK Driver Accountants tax team.

This article is general information for the 2026/27 tax year and the April 2027 changes, and is not personal tax advice. Rules and dates can change, so check GOV.UK and speak to a qualified accountant before acting. If HMRC has opened a dispute or charged a penalty, we recommend professional representation.