Making Tax Digital For Taxi drivers and Self-employed
The UK tax system is changing. Making Tax Digital (MTD) is being introduced to modernise how businesses and individuals such as taxi drivers and self-employed report their income to HMRC. Instead of filing a single annual Self-Assessment return, taxpayers will soon need to keep digital records and submit quarterly updates using HMRC-approved software.
What Is Making Tax Digital (MTD)?
Making Tax Digital is a government initiative designed to make tax administration more accurate, efficient, and easier for taxpayers.
Under the new system, individuals must:
Under the new system, individuals must:
- Keep digital records of income and expenses
- Submit quarterly updates to HMRC
- File a Final Declaration at the end of the tax year
All submissions must be made electronically using MTD-compatible accounting software or a spreadsheet with an approved bridging tool. The goal is to reduce errors, improve financial transparency, and move the UK tax system fully into the digital era.
MTD Reporting Deadlines
Each quarterly update will be cumulative from the start of the tax year, allowing corrections to earlier submissions if necessary. Quarterly submissions must be made according to HMRC reporting periods.
Despite quarterly reporting, tax payments will remain unchanged. Your tax liability will still be payable by 31 January following the tax year, not quarterly.
| Quarter | Tax Period | Calendar Period | Deadline |
|---|---|---|---|
| Q1 | 6 April – 5 July | 1 April – 30 June | 7 August |
| Q2 | 6 April – 5 October | 1 April – 30 September | 7 November |
| Q3 | 6 April – 5 January | 1 April – 31 December | 7 February |
| Q4 | 6 April – 5 April | 1 April – 31 March | 7 May |
What Will Change Under MTD?
Making Tax Digital replaces the traditional annual Self-Assessment tax return with a digital reporting process completed throughout the year.
Digital Record Keeping
You must keep digital records of your income, expenses, and business transactions using MTD-compatible software (such as Xero, QuickBooks) or a spreadsheet connected to an approved bridging tool.
Quarterly Updates
Instead of one annual return, you will submit four quarterly updates to HMRC summarising your income and expenses.
Final Declaration
At the end of the tax year, you will submit a Final Declaration confirming your total income and final tax position.
Prepare Your Business for Making Tax Digital
Speak with our experts today and ensure your records, software, and submissions are fully MTD compliant.
What Do You Need to Comply with MTD?
To meet Making Tax Digital requirements, you will need several things in place.
- MTD-Compatible Software
You must use software approved by HMRC to maintain digital records and submit updates.
- Government Gateway Account
This provides access to HMRC’s online services and tax reporting system.
- Separate Business Bank Accounts
It is recommended to have separate accounts for each source of income to keep records clear and organised.
- Clear Record Keeping
You must maintain accurate digital records of all business or property transactions.
How Digital Tax Accounting Can Help
We make the transition to Making Tax Digital simple, compliant, and stress-free for your business.
MTD-Compatible Software Setup
We help you set up and manage HMRC-approved digital accounting tools.
Quarterly HMRC Submissions
Our team prepares and submits your quarterly updates accurately and on time.
Digital Record Management
Keep your income and expenses organised with secure digital bookkeeping.
Ongoing Expert Support
Get guidance whenever you need help understanding your tax obligations.