Key takeaways
- Self-employed taxi and private hire drivers must use MTD for Income Tax from 6 April 2027 if their 2025-26 qualifying income was over £30,000.
- Qualifying income is turnover before expenses, so a driver taking £34,000 in fares with £15,000 of costs is still in.
- Drivers send four quarterly updates a year, due 7 August, 7 November, 7 February and 7 May, plus a final declaration by 31 January.
- Simplified mileage expenses are 55p a mile for the first 10,000 business miles from 6 April 2026, but black cabs and hackney carriages cannot use them.
- Since 1 January 2024, apps and booking platforms report drivers' income to HMRC each January and must give drivers a copy.
- HMRC's digital record keeping notice lets drivers with turnover below the £90,000 VAT threshold record income and expenses as simple totals rather than detailed categories.
- Licence renewals need an HMRC tax check code, a 9-character code that is valid for 120 days.
Self-employed taxi and private hire drivers must use Making Tax Digital (MTD) for Income Tax from 6 April 2027 if their qualifying income on the 2025-26 tax return was over £30,000. The test uses fares before costs, so many drivers with modest profits will be in. You keep digital records, send four quarterly updates a year through compatible software and file a final declaration by 31 January.
Do taxi drivers have to use MTD for Income Tax?
Yes, if you are self-employed and over the threshold. HMRC’s MTD start date guidance applies to all sole traders and landlords. There is no special rule for taxi or private hire work.
| Qualifying income | Return tested | Join from |
|---|---|---|
| Over £50,000 | 2024-25 | 6 April 2026 |
| Over £30,000 | 2025-26 | 6 April 2027 |
| Over £20,000 | 2026-27 | 6 April 2028 |
If you drive as an employee on PAYE, or through your own limited company, MTD for Income Tax does not apply to that income. Use the MTD checker for a quick answer.
Is it fares or profit that counts?
It is fares, before expenses. Qualifying income is your self-employment turnover plus any property income. Fuel, insurance, vehicle costs, licence fees and radio or app fees do not reduce it.
For example, a hackney carriage driver taking £34,000 in fares with £15,000 of costs has a profit of £19,000. Their qualifying income is still £34,000, so they join in April 2027. Our qualifying income guide covers the rules in full.
How are app fares counted?
App income needs care. HMRC has not published MTD guidance specific to taxi or ride-hailing apps. Whether your turnover is the full fare the passenger paid or the amount the app pays you depends on your contract with the operator.
- If you supply the ride to the passenger and the app takes a commission, your turnover is generally the full fare, and the commission is an expense.
- If the operator supplies the ride and pays you for driving, your turnover is what the operator pays you.
If your figure is close to £30,000, check your contract and get advice before you decide you are below the line. Since 1 January 2024, platforms must also report your earnings to HMRC under the digital platform reporting rules. GOV.UK’s platform seller guidance, updated 22 September 2025, names driving a taxi as an example of a reportable service. Your platform sends HMRC the data by 31 January and gives you a copy showing earnings and any fees or commission deducted, quarter by quarter. Make sure your return agrees with it.
What records do drivers need to keep?
You must keep digital records of each item of income and each expense in compatible software or a spreadsheet linked with bridging software. Typical records are:
- cash fares, ideally logged at the end of each shift
- card and account fares, from your card reader or operator statements
- app payouts, with the commission or fees shown
- fuel, servicing, tyres and repairs
- vehicle insurance, road tax, licence and tax check costs
- radio circuit, operator or rank fees
- phone costs and cleaning
HMRC’s digital record keeping notice, updated 27 March 2026, eases this for smaller businesses. If your turnover is below the VAT registration threshold, currently £90,000, you can record each item simply as income or expense rather than splitting it into HMRC’s categories.
Can drivers use simplified mileage expenses?
Some can. GOV.UK’s simplified expenses page gives these rates from 6 April 2026:
| Vehicle | First 10,000 miles | After 10,000 miles |
|---|---|---|
| Car or goods vehicle | 55p | 25p |
| Motorcycle | 24p | 24p |
Cars designed for commercial use are excluded, and GOV.UK names black cabs and hackney carriages. You also cannot switch to flat rates for a vehicle you have already claimed capital allowances on. GOV.UK does not say whether private hire saloons are excluded, so check before you claim. The mileage calculator works out the figure.
When are the quarterly updates due?
Every driver in MTD sends four updates a year, plus a final declaration. For the 2027-28 tax year:
- Quarter to 5 July 2027: due 7 August 2027.
- Quarter to 5 October 2027: due 7 November 2027.
- Quarter to 5 January 2028: due 7 February 2028.
- Quarter to 5 April 2028: due 7 May 2028.
- Final declaration and tax payment: due 31 January 2029.
HMRC’s quarterly updates guidance says you still send an update for a quarter with no fares, for example while your vehicle is off the road. See MTD quarterly deadlines.
Does MTD change the licence tax check?
No, the two run side by side. When you renew a taxi or private hire licence, you complete an HMRC tax check online and give the licensing authority a 9-character code. The code is valid for 120 days. The check confirms you are registered for tax; MTD is how you then report your income.
What drivers should do now
- Add up your 2025-26 fares from all sources: cash, card, account work and apps.
- Check your app contracts to see whether you report gross fares or net payouts.
- Pick software that works on your phone, so you can log fares and receipts each shift. See MTD software for sole traders.
- Sign up before 6 April 2027 if you are in. Our sole trader MTD guide covers each step.
Frequently asked questions
Do Uber and Bolt drivers have to use MTD for Income Tax?
Yes, if they are self-employed and their qualifying income on the 2025-26 return is over £30,000. The same rules apply to all app, radio circuit and hackney carriage drivers.
Does the MTD threshold use my fares or my profit?
Your fares. Qualifying income is turnover before expenses such as fuel, insurance and commission.
Do I need to record every cash fare digitally?
You must keep digital records of your income. Logging cash takings at the end of each shift keeps your records accurate and makes each quarterly update simple.
Can a black cab driver use the 55p mileage rate?
No. GOV.UK says cars designed for commercial use, including black cabs and hackney carriages, cannot use simplified mileage expenses.
Does HMRC already know what I earn through apps?
Yes, in most cases. Since 1 January 2024, digital platforms report sellers’ income to HMRC each January and send the seller a copy.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.
- Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK)
- Send quarterly updates (GOV.UK)
- Making Tax Digital for Income Tax: digital record keeping notice (HMRC)
- Simplified expenses: vehicles (GOV.UK)
- Selling goods or services on a digital platform (GOV.UK)
- Complete a tax check for a taxi, private hire or scrap metal licence (GOV.UK)