Do I Still Need to File Quarterly If My Earnings Dropped Below £50,000?

Making Tax Digital explained clearly for taxi drivers, delivery drivers, sole traders and landlords

Many self-employed people are still unsure how the new Making Tax Digital rules will affect them, especially if their income changes from year to year.

At TaxNex Ltd, we have had many drivers and sole traders asking the same question:

“My earnings were over £50,000 before, but they have now dropped. Do I still need to file quarterly under Making Tax Digital?”

The simple answer is: you may still need to file quarterly, even if your income has now dropped.

This is because HMRC does not only look at what you are earning today. For Making Tax Digital, HMRC looks at your income from an earlier completed tax year to decide when you must join the system.

That is where most of the confusion starts.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax, usually called MTD, is HMRC’s new way of managing tax records for self-employed people and landlords.

Instead of keeping records manually and dealing with everything once a year, people who fall under MTD will need to:

keep digital records;use MTD-compatible software;send quarterly updates to HMRC;submit a final return at the end of the tax year.

This does not mean you pay tax four times a year. The quarterly updates are mainly to keep HMRC informed about your income and expenses during the year. Your final tax position is still worked out at the end of the tax year.

If my income dropped below £50,000, do I still need to file quarterly?

In many cases, yes.

If your 2024/2025 tax return showed qualifying income of more than £50,000, you may need to follow Making Tax Digital from 6 April 2026.

This can still apply even if your income dropped in the next tax year.

For example, let’s say you are a private hire driver:

In 2024/2025, your gross income was £52,000.In 2025/2026, your income dropped to £42,000.

You may think you are now below the limit, so MTD should not apply. But HMRC may still bring you into MTD from 6 April 2026 because your earlier filed tax return showed income above £50,000.

This is why you should not only look at your current earnings. You need to check which tax year HMRC is using for the MTD test.

Which tax years matter for MTD?

HMRC is bringing Making Tax Digital in gradually.

The current timetable is:

From 6 April 2026, MTD applies to people with qualifying income over £50,000, based on the 2024/2025 tax year.

From 6 April 2027, MTD applies to people with qualifying income over £30,000, based on the 2025/2026 tax year.

From 6 April 2028, MTD is expected to apply to people with qualifying income over £20,000, based on the 2026/2027 tax year.

So if you were over £50,000 in 2024/2025, you should prepare now. If you were below £50,000 but later go over £30,000 in 2025/2026, your start date may be 6 April 2027 instead.

What does “qualifying income” mean?

Qualifying income usually means your total gross income from self-employment and property before expenses are deducted.

This is very important.

Many people look at their profit and think that is the figure HMRC will use. For MTD, the threshold is based on your gross income or turnover, not your profit after costs.

So if your business income was £55,000 and your expenses were £15,000, your profit may be £40,000, but your turnover is still £55,000.

For MTD threshold purposes, the £55,000 figure is the important one.

For Uber, Bolt and delivery drivers, is the £50,000 limit before or after commission?

This is one of the biggest questions we get from taxi drivers, private hire drivers and delivery couriers.

The answer is: before commission.

If you drive for Uber, Bolt, Deliveroo, Just Eat or another platform, the amount that reaches your bank account may be lower than your actual gross earnings. That is because the platform may deduct commission, service fees or other charges before paying you.

But for HMRC, your income is normally the full amount earned before those deductions.

For example:

Your total fares or delivery earnings are £55,000.The platform deducts £13,750 in commission and fees.You receive £41,250 into your bank account.

For the MTD threshold, the figure to look at is usually £55,000, not £41,250.

The commission is treated as a business expense later. It can reduce your taxable profit, but it does not reduce your gross income for the MTD threshold.

Why your bank account may not show the correct MTD figure

A lot of drivers only check what came into their bank account. That can be misleading.

Your bank statement may only show the net payout after platform deductions. HMRC may expect you to report the gross income first, then claim the commission or service fee as an expense.

This means you should check your platform statements properly, not just your bank deposits.

For drivers, it is sensible to download yearly statements or tax summaries from your app and check:

gross earnings;platform commission;service fees;tips;refunds or adjustments;net payout received.

This gives a much clearer picture of whether you are above the MTD threshold.

What should you do now?

If you are self-employed or receive property income, you should not wait until the last minute.

You should check your previous tax returns and confirm whether your income was above the relevant threshold.

If you are a driver, courier, sole trader or landlord, you should also make sure your records are complete and digital. This will make quarterly filing much easier when the rules apply to you.

You should especially take action if:

your 2024/2025 gross income was over £50,000;your 2025/2026 gross income may be over £30,000;you work through apps such as Uber, Bolt, Deliveroo or Just Eat;you are unsure whether your income should be counted before or after commission;you have both self-employment and property income.

TaxNex note for drivers

From speaking with drivers, we know the main confusion is usually caused by the difference between gross earnings and bank payouts.

The figure you receive in your bank is not always the figure HMRC uses for threshold purposes.

If you only check your weekly or monthly payout, you may think you are below the limit when your gross income is actually above it. This is why proper records matter.

How TaxNex Ltd can help

Making Tax Digital can feel stressful, especially if your income changes from year to year or you work through several platforms.

At TaxNex Ltd, we help self-employed drivers, delivery couriers, sole traders and landlords understand exactly where they stand.

We can help you:

check whether MTD applies to you;review your previous tax returns;work out your gross income correctly;check your Uber, Bolt or delivery platform summaries;set up digital records;prepare for quarterly filing;stay compliant with HMRC.

If you are unsure whether you need to file quarterly, it is better to check now rather than wait for a deadline or penalty.

Contact TaxNex Ltd

For help with Making Tax Digital, Self Assessment or driver accounts, contact TaxNex Ltd.

Email: admin@taxnex.onlinePhone: 07477 131861

TaxNex Ltd helps self-employed drivers, couriers, sole traders and landlords stay compliant with HMRC without unnecessary stress.

FAQs

Do I still need to file quarterly if my income dropped below £50,000?

Yes, you may still need to file quarterly if your earlier tax return showed qualifying income above £50,000. A later drop in income does not automatically remove you from Making Tax Digital.

Is the MTD threshold based on profit or turnover?

The threshold is based on gross income or turnover before expenses, not your profit.

For Uber drivers, is the £50,000 threshold before or after Uber commission?

It is before commission. You should usually look at your gross earnings before Uber or any other platform deducts fees.

Does Making Tax Digital mean I pay tax every quarter?

No. Quarterly updates are reports to HMRC. Your final tax liability is still calculated after the end of the tax year.

When does MTD start for income over £30,000?

The £30,000 threshold applies from 6 April 2027, based on the relevant earlier tax year.

Who should check their MTD position now?

Taxi drivers, delivery couriers, landlords, sole traders and anyone with changing self-employed income should check their position early.