How new HMRC digital tax rules will hit ALL taxi drivers earning over £20,000 in fares by April 2028
- Perry Richardson
- May 12
- 2 min read
All self-employed taxi drivers taking over £20,000 in annual revenue will be required to follow new tax reporting rules under HMRC’s Making Tax Digital (MTD) scheme from April 2028 at the latest.
The new requirement affects those registered for Self Assessment who earn their income from self-employment, property, or both. Qualifying income refers to gross income before any deductions and does not include earnings from employment or dividends. For taxi drivers, this means their takings before costs like fuel or vehicle maintenance will be used to determine whether they meet the threshold.
Drivers in the £20,000 to £29,999 range will not be impacted until 6 April 2028. Those earning above £50,000 must follow the rules from as early as April 2026, with those above £30,000 joining a year later in 2027.
When the rules come into force for drivers earning above £20,000, they will need to keep digital records and submit quarterly updates to HMRC using compatible software. An end-of-year final declaration will also be required, replacing the single Self Assessment submission currently used.
HMRC has confirmed more details for this income band will be released closer to the 2028 start date. Taxi drivers should begin reviewing how they record income and consider whether their systems are ready for digital reporting ahead of the 2028 requirement.
How taxi drivers can start preparing now for incoming Making Tax Digital changes
Drivers might now look at how they currently keep financial records. Under MTD, paper or spreadsheet-based methods may not be enough. HMRC will require digital records to be kept and updated using approved software.
Preparing now by switching to digital bookkeeping should make the transition smoother. There are software options specifically designed for self-employed workers and sole traders, some with features aimed at drivers, like vehicle expense categorisation.
It’s also worth speaking with an accountant or tax adviser. They can help drivers understand what changes are coming and what support may be needed to stay compliant.
