Many taxi drivers remain unprepared for imminent shift in HMRC tax rules as Making Tax Digital begins in April
- Perry Richardson
- 14 minutes ago
- 2 min read
Taxi drivers and other sole traders across the UK are weeks away from a major change in how they report their earnings to HM Revenue & Customs, with the Government’s Making Tax Digital (MTD) for Income Tax rules set to begin from April 2026.
The new system will require self-employed workers turning over above £50,000 in revenue to keep digital records and submit quarterly updates to HMRC using compatible accounting software. The requirement will later expand further when the threshold drops to £30,000 from April 2027, bringing many more taxi and private hire drivers into the system.
However, engagement with drivers by TaxiPoint suggests a significant proportion of the trade has yet to prepare for the change. Some drivers say they are waiting for further guidance, while others admit they have not yet taken steps to move away from traditional bookkeeping methods.
Several drivers say they have so far chosen to ignore the requirement, when asked if he had selected software to manage the new digital reporting system.
Many self-employed drivers remain unprepared for HMRC’s new digital reporting requirements as the first phase of the scheme approaches.
Others expressed frustration or uncertainty about the transition. One cabbie described the change as a “nightmare”, reflecting wider concerns within parts of the self-employed sector about the increased administrative burden of quarterly reporting.
The rules apply based on total turnover rather than profit, a detail that has caused confusion among some drivers. High running costs are pushing some cabbies earning a modest profit into the new tax reporting scheme as a result.
Making Tax Digital for Income Tax is part of HMRC’s wider effort to modernise the tax system and reduce reporting errors by requiring digital record keeping and regular submissions rather than a single annual tax return. For many taxi drivers, who often operate as sole traders, the change represents one of the most significant shifts in tax administration for the sector in years.
Industry groups have previously warned that awareness of the reform among some self-employed workers remains low. With the April 2026 start date approaching, drivers who exceed the threshold will need to ensure their records are maintained digitally and submitted through approved software or risk falling behind the new compliance requirements.
