Most owner-drivers are sole traders, and most sole traders have spent years doing their tax once a year through Self Assessment - a January deadline, a box of fuel receipts, and a long evening. Making Tax Digital for Income Tax replaces that rhythm for the traders it catches, and the thresholds that decide who is caught are already live for the first wave.
HMRC’s guidance on checking whether you need to use Making Tax Digital for Income Tax sets the test. You need to use it if you are a sole trader or a landlord registered for Self Assessment and your qualifying income is more than the relevant threshold for the tax year. The thresholds step down:
The direction of travel is obvious: the net widens. An owner-driver whose business takes over £50,000 in a year is in the first wave; one above £30,000 follows a year later. That £30,000 figure covers a large slice of full-time owner-drivers.
The test runs on qualifying income within a tax year - HMRC’s page links to a separate tool to work out yours - and HMRC checks it against your Self Assessment return. The page describes the mechanism directly: HMRC reviews your Self Assessment tax return and checks your qualifying income each tax year. To decide who needed to start from April 2026, it reviewed 2024 to 2025 returns, and traders over £50,000 should have received a letter confirming they need to use the service.
Two things fall out of that. First, this is income - the turnover line - not the profit left after the wagon, the fuel, the insurance and the tyres. A driver who turns over £55,000 and makes £28,000 profit is over the first threshold. Second, the letter is not the trigger; the income is. HMRC says that if you think you should sign up because your qualifying income is over the threshold but you have not received a letter, you should act anyway - the page sets out what to do in that case.
Signing up is the visible bit; the working change is underneath it. HMRC’s guidance on using Making Tax Digital for Income Tax describes the shift from one annual return to digital record-keeping with updates sent through software during the year. You choose and authorise software for the service - or decide how your agent will act for you if you have one - and the software becomes the channel between your records and HMRC rather than the annual Self Assessment form alone.
For an owner-driver, the practical shape is: records of income and expenses kept digitally as the year goes on, updates sent from the software through the year, and a final declaration process at the end. The shoebox of receipts stops being a filing system and becomes a backlog, because the record-keeping is continuous rather than reconstructed in January.
Not quite, and do not let anyone tell you the annual deadline disappears. The structure changes - digital records, updates through the year, a final declaration - but there is still a year-end point at which the position is finalised. What genuinely changes is that the figures already exist by then, because they were built up through the year instead of assembled from a carrier bag.
The guidance makes room for an agent to act for you, and most owner-drivers already have an accountant. What changes under MTD is where the day-to-day records live: if the receipts still travel to the accountant in a carrier bag each January, the digital-records part of the regime has not happened, whoever signs the filings. Sort out early who keeps the digital records through the year, whose software they live in, and who authorises what. The cleanest arrangements are the ones where that conversation happened before the start date, not during the first panic.
If you are over £50,000 and in scope from April 2026, sign up now - the guidance is explicit that late joiners should still sign up. If you are in the £30,000 wave, April 2027 sounds distant but the traders who find it painless are the ones who pick software and start digital records well before the date, not the ones who start the following Easter. Either way, check your qualifying income on the GOV.UK tool rather than guessing from memory - the number that matters is the one HMRC reads off your return.