MTD for Taxi and Private Hire Drivers —
Cash, Card and App: What Actually Counts
Use gross fares — before any commission, radio circuit fees, or platform fees are deducted.
If you drive a black cab, a private hire vehicle, or a minicab for a local firm, you're self-employed for tax purposes in exactly the same way as any other sole trader — and Making Tax Digital applies to you on the same gross-income basis. What's different about taxi and private hire work is how many separate income streams a typical week can involve: street hails paid in cash, card readers, account work invoiced monthly, radio circuit bookings, and increasingly, app-based platforms like Uber, Bolt or FreeNow layered on top.
None of that complexity changes the rule. Every fare, however it was paid and however it was booked, counts towards your MTD qualifying income. This guide walks through exactly how to add it all up, what you can claim back, and what your quarterly reporting will actually look like.
Your MTD Threshold as a Taxi or Private Hire Driver
| Tax Year Assessed | Threshold | MTD Start Date |
|---|---|---|
| 2024–25 | Over £50,000 | 6 April 2026. Live since April 2026 |
| 2025–26 | Over £30,000 | 6 April 2027 |
| 2026–27 | Over £20,000 | 6 April 2028 |
Over 860,000 self-employed drivers and sole traders were caught by the April 2026 rollout alone, and taxi and private hire drivers make up a significant share of that number. HMRC began writing directly to affected drivers from May 2025 based on 2024/25 Self Assessment figures — if you earned over £50,000 gross that year, you should already be using MTD-compatible software.
Every Income Stream Adds Up, No Exceptions
Whether you receive a fare through a taxi meter, a card machine in the vehicle, a monthly account invoice, or an app that deposits your share weekly, HMRC treats it identically: it's gross self-employment income, and it counts in full. This includes:
- Cash fares, whether from street hails or rank pickups
- Card and contactless payments taken in the vehicle
- Radio circuit and dispatch bookings, including the controller's commission before it's deducted
- Account and corporate work, invoiced monthly to businesses or schools
- App-based platform fares (Uber, Bolt, FreeNow) at the gross amount the app processed, before its service fee
- Airport pickup and pre-booked transfer income
- Tips, whether handed over in cash or added digitally through a card machine or app
If you drive exclusively through an app platform and want more detail specific to that setup, see our dedicated MTD for Uber and Deliveroo guide — this page focuses on the fuller mix of income that most taxi and private hire drivers actually deal with.
Worked Examples
What You Can Claim as a Taxi or Private Hire Driver
| Expense Category | Examples |
|---|---|
| Vehicle running costs | Fuel, servicing, MOT, repairs, tyres — or the simplified mileage rate instead |
| Insurance | Hire and reward (taxi/PH-specific) insurance, essential and fully allowable |
| Licensing and plating | Council PH licence, driver badge, vehicle plate renewal fees |
| Radio circuit / dispatch fees | Weekly or monthly circuit membership charged by the firm |
| Platform commission | The service fee Uber, Bolt or FreeNow deduct before paying you |
| Vehicle finance or lease costs | If the vehicle is financed or leased specifically for the business |
| Cleaning and valeting | Keeping the vehicle presentable for passengers |
| Admin costs | Mobile phone data (business proportion), accounting software |
Mileage Rate or Actual Costs?
For a vehicle used for hire, HMRC lets you choose between two methods, and it's worth comparing both in your first year under MTD:
- Mileage rate method: 55p per mile for the first 10,000 business miles per year, then 25p per mile. Simple, and only requires a digital mileage log.
- Actual costs method: Track fuel, insurance, servicing, licensing and depreciation individually. Often claims more for drivers doing high weekly mileage, since a vehicle used for hire tends to run up costs faster than an ordinary commuter car.
Once you choose actual costs for a vehicle, you generally need to stick with that method for as long as you use that vehicle in the business — so it's worth doing the sums properly before deciding, ideally with your first quarter's real numbers rather than guesswork.
Practical Digital Records for Drivers
The realistic challenge for most drivers isn't understanding the rule, it's capturing everything from several different sources consistently. What works well in practice:
- Export weekly statements from any app platform you use. Uber, Bolt and FreeNow all provide downloadable earnings summaries showing gross fares before their fee
- Keep a simple daily cash log for street hail and rank income, ideally logged the same day rather than reconstructed later
- Photograph fuel and maintenance receipts at the point of purchase using your MTD software's mobile app
- Request monthly statements from your radio circuit or account customers rather than trying to total up individual jobs
- Separate your business banking if you haven't already — mixing personal and driving income makes digital record-keeping considerably harder than it needs to be
Best MTD Software for Drivers
Software links are affiliate — help fund CheckMyMTD. Recommendations based on suitability for mobile, on-the-road record keeping.
MTD Quarterly Deadlines for Drivers
| Quarter | Period | Deadline | 2026–27 Soft Landing |
|---|---|---|---|
| Q1 | 6 Apr – 5 Jul 2026 | 7 Aug 2026 | No points if late |
| Q2 | 6 Apr – 5 Oct 2026 | 7 Nov 2026 | No points if late |
| Q3 | 6 Apr 2026 – 5 Jan 2027 | 7 Feb 2027 | No points if late |
| Q4 | 6 Apr 2026 – 5 Apr 2027 | 7 May 2027 | No points if late |
| Final Declaration | Full year 2026–27 | 31 Jan 2028 | Not soft-landed |
Frequently Asked Questions
Do cash fares count the same as card or app payments?
Yes. Every fare counts towards your MTD qualifying income regardless of how the passenger paid you — cash in hand, card reader, contactless, or through an app like Uber or Bolt. There is no separate or lower-scrutiny category for cash jobs, and HMRC's digital record-keeping requirement under MTD makes inconsistent records considerably easier to spot than under the old annual return.
I drive for a private hire firm and also take app bookings — do both count together?
Yes. Your MTD qualifying income is your total gross self-employment income from all driving sources combined — radio circuit bookings, account work, street hails, and app-based platforms like Uber or Bolt. These are added together to determine your threshold and phase, not assessed separately.
Does the licence plate or badge cost count as an expense?
Yes. Taxi and private hire licence fees, badge renewal costs, and vehicle plating fees are allowable business expenses. They reduce your taxable profit but do not reduce your MTD qualifying income, which is assessed on gross fares before any expenses are deducted.
Can I use the mileage rate instead of tracking actual vehicle costs?
Yes, if you are a sole trader you can use HMRC's simplified mileage rate (55p per mile for the first 10,000 business miles, then 25p per mile) instead of tracking fuel, insurance, servicing and depreciation separately. Many drivers find actual costs claim more once vehicle-for-hire running costs are factored in, so it is worth comparing both methods for your first year under MTD.
What if I drive part-time alongside a PAYE job?
Your PAYE salary does not count towards the MTD threshold at all. Only your gross self-employed driving income counts. A driver earning £32,000 PAYE plus £18,000 gross from part-time private hire work has qualifying income of only £18,000, below all current MTD thresholds.
Check Your Full MTD Position
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