Guide
Making Tax Digital for HGV Owner-Drivers
Making Tax Digital for Income Tax changes how a sole trader reports. Instead of one return after the year end, you keep digital records and send quarterly updates, with a final declaration after the year.
It arrives in phases based on qualifying income, and the phase you land in is decided by a tax year that has usually already finished by the time anybody looks.
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Written by the HGV Accountants editorial team
- Who this is for
- Self-employed HGV owner-drivers and haulage sole traders with income from self-employment or property.
- The problem
- Making Tax Digital replaces one annual return with quarterly digital reporting, and the date it starts for you depends on a figure most owner-drivers have never had a reason to calculate.
When It Starts for You
| Qualifying income over | Measured in the tax year | You start from |
|---|---|---|
| £50,000 | 2024 to 2025 | 6 April 2026 |
| £30,000 | 2025 to 2026 | 6 April 2027 |
| £20,000 | 2026 to 2027 | 6 April 2028 |
What Actually Changes
| Now | Under Making Tax Digital | |
|---|---|---|
| Records | Any format, including a carrier bag of receipts | Digital records, kept using compatible software |
| Reporting | One return after the tax year | Quarterly updates, then a final declaration |
| Timing | Records can be caught up after the year end | Records have to be current enough to report each quarter |
| Payment dates | Unchanged by these rules | Unchanged by these rules |
The payment dates are not what changes. What changes is that a year of paperwork can no longer be assembled in January, because three of the four quarters will already have been reported.
Getting a Truck's Records Ready
For most owner-drivers the work is not the software, it is the habits around the four documents that make up almost the whole ledger.
What has to become routine
- Sales or self-bill statements captured every month rather than at the year end. Self-billing has its own trap here.
- Fuel card statements downloaded and posted monthly, not filed. See fuel card bookkeeping.
- A business bank account that is actually separate from the personal one.
- Receipts photographed at the point of spending, because a receipt in a cab is a receipt that is going to be lost.
- The vehicle finance agreement recorded once, correctly, with capital and interest split.
Every one of those is worth doing regardless of the rules, because they are the same records that produce a usable cost per mile.
Common Questions
Does Making Tax Digital apply to me if I am a limited company?
These rules are for Income Tax, so they apply to sole traders and landlords rather than to companies. A company driver-owner is already filing company accounts and a Corporation Tax return. If you are VAT registered, Making Tax Digital for VAT applies to the company separately and already does.
How is qualifying income worked out if I only started part way through the year?
It is based on the income reported for the tested tax year. A part year of trading produces a smaller figure, which can push the start date into a later phase. HMRC writes to people it identifies as being in scope, though the obligation to check does not depend on receiving a letter.
Will I still file a Self Assessment return?
The annual return is replaced by the quarterly updates plus a final declaration that brings the year together and covers anything outside the business. In practice it is the same information, reported more often, with the year-end step confirming it.
Can I keep using a spreadsheet?
Records have to be kept digitally and returns submitted through compatible software. A spreadsheet can form part of that where it is linked to compatible software, but a spreadsheet on its own with figures typed into a portal is not the model these rules are built around.
Related Guides
- Fuel Cards and VATWhy the bank payment is not the entry, and how to make the VAT on diesel actually recoverable.
- Self-BillingWhen the customer raises your invoice, the risk moves to you. What to check and what to keep.
- Cost Per MileWhat a mile costs, what empty running does to it, and the rate you need to stand still.
A Fixed Quote for the Truck or the Fleet
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- Nothing charged until you accept the quote
- We tell you if you do not need what you asked for
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