Making Tax Digital for Ride-Hailing Drivers: Your Questions Answered

Making Tax Digital for ride-hailing drivers is the HMRC (His Majesty's Revenue and Customs) rule that moves your income tax reporting online. If your self-employed income was over £50,000 in 2024/25, you have to use it from 6 April 2026. Everyone else is brought in over the next two years, so the real question is which date applies to you.

This guide answers the questions we hear most from drivers, then gives you a driver-by-driver table to find your own start date. It also covers the awkward cases: a day job on the side, rental income, a limited company and a quiet quarter. Our other guides cover VAT under Making Tax Digital and the limited company position, so we link to them rather than repeat them.

Key takeaways

• Your start date depends on your qualifying income: over £50,000 from 6 April 2026, over £30,000 from April 2027 and over £20,000 from April 2028.
• Qualifying income means self-employment and property income before expenses, not your profit.
• You send four quarterly updates a year plus your tax return. The updates are summaries, not tax bills.
• For 2026/27, HMRC does not issue penalty points for late quarterly updates. Late returns and late payments are still penalised.
• Even a quarter with no work needs an update.

What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) for Income Tax is a system where you keep digital records of your self-employed income and costs. Compatible software then sends HMRC a summary every three months, and you still file a final tax return by 31 January. It applies to self-employed people and landlords, not to employees paid through PAYE (Pay As You Earn).

Does Making Tax Digital apply to me? A driver-by-driver table

It applies to you if your qualifying income is above the threshold for the year you fall into. Qualifying income is your total self-employment and property income before expenses. According to HMRC's sign-up guidance, it is taken from the tax return you submitted in the previous year. Use the table below, then confirm your position on GOV.UK.

The later thresholds come from the Government's published rollout. HMRC confirms £30,000 from April 2027 and £20,000 from April 2028 in its announcement about the first quarterly deadline. Rules can change, so check GOV.UK each autumn.

Which year's income decides whether I am in?

HMRC looks back at an earlier tax return, not your current earnings. For the 2026/27 tax year, it uses your qualifying income from the 2024/25 tax year. That means a driver who earned more than £50,000 in 2024/25 is in scope even if 2025/26 was quieter.

HMRC's guidance on what to do if HMRC has signed you up confirms this. It also says HMRC is signing up eligible people who have not registered themselves, in stages from September 2026. You will get a letter in your online account or by post. If the details are wrong, contact Self Assessment general enquiries.

What do I have to do in each quarter?

You keep digital records through the year, then send an update after each period ends. The update is a summary of your income and expense totals by category. It is not a tax return, and HMRC does not ask for individual receipts.

The quarterly updates guidance sets out two kinds of period. Most drivers use the standard periods, which follow the tax year. Each update is cumulative, so it covers everything from 6 April to the end of the period.

Calendar periods only suit businesses whose accounting year runs from 1 April to 31 March. You must choose them in your software before your first update, and you cannot switch part-way through the year. Most drivers should keep the standard periods.

How do I send a quarterly update? A step-by-step process

You send a quarterly update through compatible software, which collects your records and sends the totals to HMRC. The steps below are the sequence we use with drivers, built from HMRC's guidance.

1. Check your sign-up details in your HMRC online account, including every self-employment and property source.
2. Choose software from HMRC's list of compatible software and link it to your Government Gateway login.
3. Record every fare, tip, fee and cost as it happens, including cash jobs.
4. When the period ends, review the totals for each category and fix any obvious errors.
5. Submit the update on or before the deadline, which is the 7th of the month after the period closes.
6. Check the tax estimate your software shows, and set money aside for 31 January.
7. Repeat for each quarter, then complete your final declaration and tax return by 31 January.

What counts as a digital record for a ride-hailing driver?

A digital record is any entry kept in software or a spreadsheet linked to compatible software, rather than on paper. For a driver, that means fares, tips, operator fees, fuel or charging, insurance, licensing, servicing and mileage. Cash fares and direct bookings are income, so they go in too. Our guide to mileage logs and bookkeeping records shows what a clean record looks like.

Which software works?

HMRC does not provide software. You need a product on its compatible list, and it must support the sources you report. Our guide to software for Making Tax Digital explains how to compare options without us recommending a brand.

What if I have mixed income?

If you have more than one source of self-employment or property income, HMRC adds them together to test the threshold. A driver with £38,000 of driving turnover and £15,000 of rent has £53,000 of qualifying income. That is over £50,000, even though neither source is on its own.

Wages from a PAYE job do not count towards the threshold. They still belong on your tax return. HMRC's sign-up service does not ask about other income, so you add it in your software before you submit the return.

All UK rental properties count as one UK property business, and all overseas properties as one overseas property business. Each business needs its own quarterly update, so a driver with rent sends two updates per quarter.

Illustrative example

This is an illustrative example with invented figures. Sam drives full time as a sole trader. His 2024/25 return showed turnover of £52,400, so HMRC treats him as in scope from 6 April 2026. Sam uses the standard quarterly periods. His cumulative figures for 2026/27 are below.

Sam sends each figure on the 7th of the month after the period ends. In update 3 he finds a missed fuel receipt, and he adds it to his records. It then appears in the cumulative total of the next update, without a separate correction. His profit is £34,700 before his tax-free allowance, so he sets aside part of each week for his January bill. Use our tax calculator for your own estimate.

What are the common mistakes and the penalties they trigger?

Most mistakes come from treating a quarterly update as optional or low priority. The penalty rules are simple but they depend on the tax year, so read this section with care.

• Missing a quarterly deadline. For 2026/27 there are no penalty points. From 2027/28, each missed deadline adds a point, and four points trigger a £200 penalty.
• Skipping a quiet quarter. HMRC says you must still send an update when you had no income or expenses.
• Filing the tax return late. Late return penalties still apply in 2026/27, whatever the quarterly rules say.
• Paying late. Late payment penalties and interest apply as before.
• Ignoring an HMRC sign-up letter. If you think it is wrong, contact HMRC, because HMRC may treat you as in scope.
• Mixing up volunteering and being required. A volunteer faces no quarterly penalty, but reaching two late-return points means a £200 penalty.

If HMRC raises a dispute or a penalty, speak to a qualified accountant before you reply. Professional representation usually gets a better outcome than a hurried letter. If you cannot use software at all, read HMRC's page on applying for an exemption first.

Key terms

• MTD: Making Tax Digital, HMRC's online reporting system.
• Qualifying income: self-employment and property income before expenses.
• Cumulative update: a quarterly figure covering the whole tax year to date.
• Calendar period: an optional quarter ending on 30 June, 30 September, 31 December or 31 March.
• Penalty point: a mark HMRC adds for a missed deadline.

How UK Driver Accountants helps

UK Driver Accountants works with drivers only. We are independent of any ride-hailing app, and our fixed fees start from £20 a month. We check your start date, set up your records, send each quarterly update and file your tax return. Our Making Tax Digital service covers all of it, and you can see the full list on our pricing page. If you are also near the VAT line, our VAT service can look at both at once.

Conclusion

Find your row in the table, note your start date and set up your records before the first deadline that applies to you. If you want someone to do the quarterly updates, contact us and we will confirm your position in plain English. You can also read our guide to key tax dates and our comparison of Self Assessment and Making Tax Digital.

Last reviewed 1 November 2026 by the UK Driver Accountants tax team

This article is general information and is not personal tax advice. Speak to a qualified accountant about your own circumstances, and use professional representation if HMRC raises a dispute or penalty.