HMRC Is Auto-Enrolling Taxi Drivers Into Making Tax Digital

Tax Queen

Tax Expert @ Pie

3 min read

If you're a taxi or private hire vehicle (PHV) driver earning above £50,000 a year, HMRC has started signing you up for Making Tax Digital for Income Tax automatically, even if you hadn't registered yourself. This began in stages from September 2026, and if you're affected, you'll need to start keeping digital records and act quickly to catch up.

Does This Affect You?

If you're a sole trader or landlord and your combined gross income (before expenses) went over £50,000 in the 2024/25tax year, you should already be using Making Tax Digital for Income Tax. That's been the rule since 6 April 2026, unless you're exempt.

HMRC has now started automatically enrolling people who met that threshold but hadn't signed up themselves or through an accountant.

Taxi and PHV drivers are among those affected, not because they've been singled out as a trade, but because so many operate as sole traders and often haven't got round to registering for Making Tax Digital.

If you're not sure whether your own income puts you in scope, our guide on when Making Tax Digital applies to self-employed taxpayers breaks down the thresholds and start dates in full.

You'll find out you've been enrolled either through your HMRC online account or by letter.

What's Actually Changed

Nothing new is being asked of you that wasn't already required. What's changed is that HMRC has started acting on its own records rather than waiting for you to register.

It's using the income figures you've already reported through Self Assessment to work out who's crossed the threshold and hasn't complied.

If you're one of the drivers being enrolled, this is HMRC catching up with the rules, not introducing a new obligation.

What You Need To Do Once You're Enrolled

Log In and Check Your Records

Sign in to HMRC's online services using your existing Self Assessment details and select Making Tax Digital for Income Tax.

Review the self-employment and property income sources HMRC has on file, and confirm they're accurate.

Add anything missing, such as a new business or a rental property

HMRC may have based your enrolment on your 2024/25 return, or your 2025/26 return if that had already been submitted.

If your circumstances have changed since then (you've stopped driving, started a different business, or something similar) you'll need to update that information yourself.

Our full guide to Making Tax Digital for sole traders and landlords covers the wider rules if you want more background.

Get Compatible Software

You'll need commercial software that can keep digital income and expense records, submit your quarterly updates, and complete your tax return.

HMRC doesn't provide its own, though it does list free and paid options.

Our guide to choosing MTD-compatible software covers what to check before you commit.

Pie Tax handles the whole process, from digital record-keeping through to submission, with HMRC dealt with on your behalf. You can see how it works before deciding.

Backdate Your Records

Your obligation started on 6 April 2026, not the date on HMRC's letter.

If you've been enrolled partway through the year, you'll need to bring your digital records up to date from that date and get any overdue quarterly update submitted as soon as you can

Quarterly Updates Aren't the Same As Your Tax Return

Your quarterly submissions are simply totals drawn from your digital records. They are not tax returns in themselves.

You'll still need to complete your full annual tax return and pay everything owed by 31 January following the end of the tax year.

HMRC has said there won't be penalty points for late quarterly updates during 2026/27.

That doesn't mean you can skip keeping digital records, though, and your final quarterly update still has to be submitted before your annual return can be filed.

Penalties can still apply if the return itself is late.

Think HMRC Got It Wrong?

If you don't believe you should have been enrolled, contact Self Assessment rather than ignoring the notice.

There's an exemption available if digital exclusion means it genuinely isn't reasonable for you to use compatible software, though this isn't automatic and HMRC has to accept it.

If your self-employment or property business ended before 6 April 2026, you'll still need to update your HMRC account and submit your 2025/26 return.

If it ended on or after 6 April, you'll generally need to use Making Tax Digital up to your cessation date and submit your 2026/27 return before the obligation ends.

Getting Started with Making Tax Digital

Being automatically enrolled isn't a penalty, it's HMRC bringing your account in line with rules that already applied to you.

The real work is getting your records sorted quickly and choosing software that takes the admin off your plate.

Sign up today for free to get your digital records in order, or find out why drivers choose Pie Tax to handle their Making Tax Digital obligations from quarterly updates through to final submission.

Get Started for Free