Tens of thousands of taxi drivers and sole traders in Scotland face deadline as Making Tax Digital reporting rules take effect in April
- Perry Richardson
- 2 hours ago
- 2 min read
More than 50,000 taxi drivers, sole traders and landlords in Scotland are approaching a key deadline to comply with new digital tax reporting requirements, with mandatory changes set to take effect from 6 April 2026.
HM Revenue and Customs (HMRC) confirmed that individuals turning over more than £50,000 from self-employment or property income will be required to use Making Tax Digital (MTD) compatible software to manage their tax affairs. The move represents the most significant reform to the Self Assessment system since its introduction in 1997.
New HMRC data shows approximately 39,000 sole traders and 4,000 landlords in Scotland fall within scope for the 2026 to 2027 tax year, alongside a further 8,000 individuals who operate as both. Most affected taxpayers are expected to receive direct communication from HMRC outlining their obligations and next steps.
Under the new rules, users must maintain digital records and submit quarterly updates summarising income and expenses, alongside an annual tax return. The first reporting period will run from 6 April to 5 July 2026, with submissions due by 7 August 2026.
Around 51,000 sole traders and landlords must adopt Making Tax Digital software within weeks ahead of major overhaul to Self Assessment system
Craig Ogilvie, HMRC’s Director of Making Tax Digital, described the shift as a “generational change”, adding that the system is designed to spread administrative workload more evenly throughout the year. He noted that quarterly updates are not full tax returns but simplified summaries generated automatically through compatible software.
Despite the scale of the transition, HMRC has introduced a soft-landing period for compliance. No penalties will be issued for late quarterly updates during the 2026 to 2027 tax year, although late annual tax returns will still incur points under a new penalty regime. A £200 fine will only be triggered once four penalty points have been accumulated.
The department said around 100,000 taxpayers across the UK have already signed up voluntarily, with more than 15,000 quarterly submissions successfully completed as part of a testing programme. This early adoption is expected to ease the transition as the system becomes mandatory.
Tax agents are expected to play a central role in implementation, with HMRC research indicating 99.6% awareness among agents. Around two-thirds of affected taxpayers are represented by agents, who are being advised to engage clients ahead of the deadline.
Free and paid software options are available, with HMRC directing users to GOV.UK to select suitable providers. The software will be used to maintain digital records and generate required submissions automatically.
Taxpayers joining MTD in April 2026 will still need to file a traditional Self Assessment return for the 2025 to 2026 tax year by 31 January 2027. The first fully digital tax return under the new system, covering the 2026 to 2027 period, will be due by 31 January 2028.
