Taxi drivers report mixed experiences as first HMRC Making Tax Digital deadline approaches
- Perry Richardson
- 2 hours ago
- 3 min read
Drivers say the new quarterly reporting system has been easier than expected for some, while others question the extra administration ahead of the 7 August deadline.
Thousands of self-employed taxi drivers are preparing to submit their first quarterly update under Making Tax Digital (MTD) for Income Tax, with early feedback from within the trade suggesting the transition has been smoother than many initially feared, although concerns remain over additional administration and record keeping.
The first quarterly update must be submitted to HM Revenue & Customs (HMRC) by 7 August 2026. The requirement currently applies to self-employed people and landlords with annual business turnover from self-employment and property exceeding £50,000. The scheme will expand to those turning more than £30,000 from April 2027 before extending again to those above £20,000 from April 2028.
Unlike the annual Self Assessment tax return, the quarterly update is a summary of income and allowable business expenses submitted through compatible accounting software. Drivers will still need to complete an end-of-year tax return and pay any tax owed by the usual 31 January deadline.
To gauge how the industry is adapting, TaxiPoint asked readers: “How has your first Making Tax Digital return gone?” The responses revealed a broad mix of experiences, with several drivers saying the move to digital bookkeeping had been less disruptive than expected.
One driver, said the changes had prompted a different approach to working with their accountant. “I’m paying my accountant monthly now instead of yearly to do it for me.”
When asked whether the new arrangement had increased costs, the driver replied: “No, he told me it will be roughly the same.”
For drivers already using accounting software, the experience has often proved more positive than anticipated.
Taxi driver Kevan McNay pointed out an important distinction in the eligibility rules, reminding fellow drivers that the threshold relates to turnover rather than earnings, before adding: “A lot easier than expected… It organises things much better than my handwritten ones.”
However, McNay also raised a question that many self-employed workers are likely to be asking as they adapt to digital record keeping.
“The only question is, do I still keep physical back ups? I’ll see this financial year out, but I don’t see the need for the future.”
The discussion highlighted some uncertainty around digital receipts. While MTD requires digital record keeping, drivers are still considering whether retaining paper copies provides extra reassurance in the event of software issues or disputes. Other readers suggested continuing to keep physical copies for the time being, even if receipts have been photographed and stored digitally.
Not every driver is convinced the new system represents an improvement.
One cabbie questioned whether the additional administration delivers any practical benefit for small businesses. “Pointless, what was wrong with the way it was, photographing everything… I’m at a loss already.”
His comments reflect a wider concern among some drivers that everyday tasks, such as collecting fuel receipts, have become more significant under the new reporting regime.
The discussion also demonstrated that there remains some confusion over exactly who falls within the new rules.
Several readers debated the qualifying income thresholds before correctly agreeing that the rollout begins with those above £50,000 this year, extends to those above £30,000 from April 2027 and then to those above £20,000 from April 2028. Those thresholds mean a significant proportion of full-time taxi drivers are expected to join the scheme over the next two years.
For many within the trade, the biggest change is not accounting tax more frequently but keeping digital records throughout the year rather than gathering paperwork in January. Quarterly updates are not additional tax returns and do not create extra tax bills. Instead, they are intended to give HMRC a regular snapshot of business income and expenses while allowing drivers to view an estimated tax position as the year progresses.
With the first submission deadline now just days away, the early reaction from taxi drivers suggests that while Making Tax Digital has created extra work for some, others are beginning to see practical benefits from moving away from handwritten records. Whether those positive first impressions continue as more taxi drivers join the system over the next two years remains to be seen.
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