MTD IT for the Self-Employed on the Road

MTD IT is HMRC’s new way of collecting tax information from self-employed people and landlords. Instead of a single big tax return each year, you’ll keep digital records and send updates during the year using recognised software.

In simple terms, you need to:

1. Keep your business records in a digital format
2. Send four quarterly (year-to-date) updates to HMRC via recognised software
3. Submit a final annual declaration to confirm your tax position

This keeps your tax information up to date and gives you a clearer view of what you’re likely to owe.

Who needs to use MTD IT and when?

MTD IT started in April 2026 and applies based on your qualifying income — your gross income before expenses. It becomes mandatory for these income groups from these dates:

• April 2026: income over £50,000 (already in effect)
• April 2027: income over £30,000
• April 2028: income over £20,000

Qualifying income includes:

• Taxi, chauffeur, private hire and work booked through apps such as Uber, Bolt or Freenow
• Delivery and courier work
• Other self-employment income
• Property income

For example: £48,000 from driving plus £5,000 property income is £53,000 qualifying income, so MTD IT has applied since April 2026.

HMRC will use your 2024/25 Self-Assessment to confirm if you need to join, so checking your figures now is helpful. You can also volunteer to join early — useful for getting familiar with digital record-keeping, testing quarterly updates, and avoiding the rush in 2027 and 2028.

What digital record-keeping means in practice

You won’t need to upload every receipt, but you must keep accurate digital records to produce totals submitted to HMRC through recognised software. These typically include:

• Trip income or fares
• Fuel, insurance, MOTs and repair costs
• Vehicle finance or lease payments
• Parking and toll charges
• Mobile phone and data costs
• Accountancy fees
• Mileage claims (simplified expenses)

You can keep these records in spreadsheets or use software like TaxNav’s app, which lets you record income and expenses on the go. If you use spreadsheets, you’ll still need MTD IT-recognised software to link them to HMRC’s portal — TaxNav provides a simple bridging option so you can continue with your existing methods.

HMRC will not provide free software, so choose your digital setup early.

What quarterly reporting looks like

With MTD IT, you send HMRC four quarterly updates each tax year showing income and expenses to date. These cover:

• Driving and business income
• Running costs and expenses
• Any other qualifying income

Even in a quiet quarter, you still need to submit an update. This does not mean paying tax quarterly — you’ll still pay after your final year-end declaration. Quarterly updates don’t trigger tax bills, but your software will help you keep track so there are no surprises in January.

The final annual declaration

At the end of the tax year, you’ll submit a final annual declaration by 31 January. This replaces the Self-Assessment tax return and confirms:

• All income reported during the year
• Any additional income outside of driving
• Allowable expenses and reliefs
• Your final tax position

You must complete all four updates before submitting the final declaration. If you keep updates on schedule, January becomes a straightforward confirmation.

A note on penalties: in this first year of MTD IT (2026/27), you won’t be penalised for late or incorrect quarterly updates, but you must still submit all four before filing your 2026/27 tax return.

Getting MTD IT-ready

If you’re self-employed, you must already be registered for Self-Assessment. Once your income meets the MTD IT threshold, you must also register for MTD IT and use MTD IT-recognised software to send updates.

A practical order:

1. Check your 2024/25 income

2. Look out for HMRC’s letters confirming your start date

3. Choose MTD IT-recognised software such as TaxNav

4. Register for MTD IT in good time

5. Ensure your accountant (if you have one) has the right authorisation

6. If you use spreadsheets, TaxNav lets you keep them while staying compliant.

How TaxNav fits drivers

TaxNav is designed for the self-employed, including those working on the road. With TaxNav you can keep digital records on the go, submit quarterly updates, track your estimated tax bill, complete your final declaration, and use spreadsheets or the mobile app.

An annual subscription is £60+VAT, or £6+VAT per month pay-as-you-go, with a 30-day free trial.