Self Assessment vs Making Tax Digital: What Changes for Drivers

If you drive for Uber, Bolt or a private hire firm, you have probably heard that Self Assessment is ending. That is not what is happening. Making Tax Digital (MTD) for Income Tax changes how you keep records and how often you report, but the return, the tax rates and the 31 January deadline all stay.

This guide compares self assessment vs Making Tax Digital line by line, using GOV.UK guidance checked in September 2026. It shows who is affected, the quarterly deadlines, the penalties and the exemptions. It also includes a worked example for a driver with fares just over the £50,000 threshold.

Key takeaways

• MTD for Income Tax does not replace Self Assessment. You still send a return by 31 January and pay the same tax.
• The MTD £50,000 threshold applies to turnover before expenses, not profit, and it started on 6 April 2026.
• The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028.
• Quarterly updates are due by 7 August, 7 November, 7 February and 7 May.
• No penalty points apply for late quarterly updates in 2026/27, but points and a £200 penalty can follow in later years.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is HMRC's system that requires sole traders and landlords above an income threshold to keep digital records, send quarterly updates from compatible software and then submit an annual tax return. It uses the same tax rules as Self Assessment. Only the reporting method and frequency change.

Does MTD replace Self Assessment?

No, MTD does not replace Self Assessment. It sits on top of it. You still register for Self Assessment, still file a tax return by 31 January and still pay your bill on the usual dates. The new parts are digital records and quarterly updates in between.

According to HMRC's guidance on when you need to use Making Tax Digital for Income Tax, you must also have filed a Self Assessment return for the year before you start. So the return remains the foundation. MTD changes what you do around it.

The confusion comes from marketing that says Self Assessment is being replaced. What is really replaced is the once-a-year, catch-up-in-January habit. If you have only ever gathered your paperwork in January, MTD is a real change even though the tax itself is not.

Self assessment vs Making Tax Digital: side-by-side comparison

Who has to use MTD and when does it start?

You have to use MTD if you are a sole trader or landlord registered for Self Assessment and your qualifying income is over the threshold for your start date. The first threshold is £50,000 from 6 April 2026. It then drops in stages to £30,000 and £20,000.

HMRC looks at the return you have already filed to decide. So the first group was picked using the 2024/25 return, and the next group will be picked using your 2025/26 return, which you file by 31 January 2027. HMRC writes to people it thinks are affected, but the duty is yours whether or not a letter arrives.

What counts as qualifying income for the MTD £50,000 threshold?

Qualifying income is your total turnover from self-employment and property, before any expenses come off. For a driver, that means gross fares, tips paid through the app and any other trading income. It does not mean your profit, so high costs do not keep you below the line.

HMRC's guidance describes this as the total amount before expenses, taken from the tax return you filed for the earlier year. If you have both self-employment and rental income, they are added together. Partnerships are not yet in MTD for Income Tax, and HMRC says it will set out that timeline later.

What are the MTD quarterly update deadlines?

There are four quarterly update deadlines each year: 7 August, 7 November, 7 February and 7 May. Each covers one three-month period. You can use standard quarters ending on the 5th, or calendar quarters ending on the last day of the month, and the deadline dates stay the same.

These periods are cumulative, so each update covers the year so far. According to HMRC's guidance on sending quarterly updates, you send totals for each income and expense category, not individual receipts. HMRC does not see your individual digital records.

The 7 May update also relates to the tax year that has just ended. Then the final tax return follows, due by 31 January. For the 2026/27 year, that means the next quarterly deadlines are 7 November 2026, 7 February 2027 and 7 May 2027, with the return due by 31 January 2028. Our key tax dates guide keeps all of these in one place.

How does the MTD process work step by step?

The MTD process has five steps: choose compatible software, sign up, keep digital records all year, send four quarterly updates and then submit your final return. It is the same annual cycle as before, with extra checkpoints. Here is the order most drivers follow.

1. Check whether your qualifying income puts you in MTD, and on which date.
2. Choose compatible software and connect it to your income sources, such as Uber and Bolt statements.
3. Sign up for MTD for Income Tax, or have your accountant sign you up as your agent.
4. Record each trip payment and business cost digitally as it happens, not months later.
5. Send a quarterly update by 7 August, 7 November, 7 February and 7 May.
6. Review your figures, adjust for anything missing and submit your tax return by 31 January.
7. Pay any tax due by the usual Self Assessment date.

What stays exactly the same under MTD?

Almost all of the tax rules stay the same. MTD changes how you report, not what you owe, so your rates, allowances, payment dates and allowable expenses work exactly as they did before. The list below shows the main things that do not change for a driver.

• Income Tax and Class 4 National Insurance rates and allowances.
• The 31 January deadline for your tax return and bill.
• Payments on account, where they apply to you.
• What counts as an allowable expense. See our guide to allowable expenses for Uber drivers.
• The need to keep records for the time HMRC requires.

HMRC's guidance says MTD does not change the way you pay tax or the dates payments are due. If you want a broader introduction, our Making Tax Digital explained for Uber drivers covers the basics from scratch.

What are the MTD penalties for late updates and late payment?

MTD uses penalty points for late submissions and a separate sliding scale for late payment. You get one point for each missed deadline, and 4 points triggers a £200 penalty. HMRC will not apply points for late quarterly updates in 2026/27.

According to HMRC's guidance on penalties for Making Tax Digital for Income Tax, each missed quarterly update (for tax years after 2026/27) or tax return deadline earns a point, and you can only get one point per deadline. Below the threshold, points fall away automatically 24 months after the missed deadline. Once you reach 4 points, you must file on time for 12 months and send anything outstanding to clear them.

Late payment works differently. For 2026/27, HMRC lists no penalty up to 15 days late, then a penalty of 3% of the tax owed from day 16, with more for longer delays and an annual rate on top after 30 days. Interest also runs from the first day a payment is late. Check the current details on the GOV.UK page before relying on any figure.

Can you be exempt from Making Tax Digital?

Yes, some people are exempt. If your qualifying income is £20,000 or less you are outside the rules, and other people can apply for an exemption if they are digitally excluded. HMRC decides each application, so you should not assume you are exempt.

HMRC's guidance on exemptions also lists some automatic exemptions, such as people without a National Insurance number, and some temporary ones tied to certain return pages until April 2027. Digital exclusion covers age, health, disability, religious belief or no internet access at your home or business because of location. You apply by phone or in writing, and HMRC aims to reply within 28 calendar days.

Illustrative example: a driver just over the threshold

This is an illustrative example using an invented driver, and the numbers are round to keep it clear. Imagine a private hire driver whose 2024/25 return showed £52,000 of gross fares, £19,000 of business costs and £33,000 profit. Because £52,000 is over £50,000, she is in MTD from 6 April 2026, even though her profit is well below the threshold.

Her tax bill is worked out on her real profit, using the same rates as before. The difference is that she now uses software to record fares and costs during the year. If she was unsure of her own figures, our tax calculator gives a starting estimate, though it is not a substitute for a filed return.

Do I need software, and what should it do?

Yes, you need HMRC-compatible software to keep digital records and send quarterly updates. Which product you choose is your decision. For a driver, the useful features are importing platform statements, tracking mileage or vehicle costs and sending updates without retyping figures.

HMRC's guidance on using Making Tax Digital for Income Tax walks through getting your software ready, creating digital records and sending updates. Keep in mind that the software sends only category totals, so your records must be tidy enough to support them if HMRC asks.

Common mistakes and the penalty each triggers

None of these are inevitable. Most are avoided with a diary of dates and clean records from the first week of the tax year. If HMRC has already opened a dispute or issued a penalty, professional representation is recommended before you reply.

Key terms

• MTD: Making Tax Digital, HMRC's programme for digital records and updates.
• Qualifying income: turnover from self-employment and property before expenses.
• Quarterly update: a summary of income and expenses sent every three months.
• Penalty point: a mark for each missed submission deadline; 4 points triggers a £200 penalty.
• Compatible software: software that can connect to HMRC's MTD service.
• UTR: Unique Taxpayer Reference, your ten-digit Self Assessment number.

How Uber Driver Accountant helps

Uber Driver Accountant works only with drivers, and we are independent of Uber and Bolt. Our Making Tax Digital service checks whether and when MTD applies to you, sets up your digital records and sends each quarterly update and final return for you. Fees are fixed and start from £20 a month, and you can see them on our pricing page.

If you are also new to filing, our first tax return guide for new Uber drivers is a helpful starting point.

Conclusion

Self assessment vs Making Tax Digital is really old rules with a new rhythm. Your tax is worked out the same way, but you report four times a year and keep digital records. If your gross fares are near £50,000, £30,000 or £20,000, check your start date now. Contact us and we will confirm your position and handle the rest.

Last reviewed 19 September 2026 by the Uber Driver Accountant tax team.

This article is general information and is not personal tax advice. Thresholds, dates and penalties can change, so speak to a qualified accountant about your own circumstances. If HMRC has raised a dispute or penalty, professional representation is recommended.