Making Tax Digital for couriers: what sole traders need to know

If you’re a self-employed courier, tax admin is changing.

Making Tax Digital, often shortened to MTD, will affect many sole traders over the next few years. For couriers, that means you may need to keep digital records, use compatible software and send regular updates to HMRC instead of pulling everything together once a year.

That does not mean every courier needs to change everything tomorrow. The rules are being introduced in stages, and when they apply to you depends on your qualifying income.

This guide explains what Making Tax Digital means for courier sole traders, when it starts, what records you’ll need to keep and how to prepare.

This article is for general information only and is not tax advice. For advice about your own tax position, speak to HMRC or a qualified accountant.

What is Making Tax Digital?

Making Tax Digital is HMRC’s new way for sole traders and landlords to report their income and expenses.

Instead of keeping paper records, loose receipts or end-of-year spreadsheets, many sole traders will need to keep digital records using software that works with Making Tax Digital.

For self-employed couriers, that could mean recording your courier income, expenses, mileage, invoices and business costs digitally throughout the year.

Under Making Tax Digital for Income Tax, you or your accountant will use compatible software to:

• Create and store digital records
• Send quarterly updates to HMRC
• Submit your tax return
• Pay any tax due by 31 January the following year

HMRC says Making Tax Digital for Income Tax is being introduced for sole traders and landlords, and compatible software will be needed to create digital records, send quarterly updates and submit tax returns.

Does Making Tax Digital apply to couriers?

Making Tax Digital may apply to you if you work as a self-employed courier or sole trader.

For example, you may be affected if you:

• Work as an owner-driver
• Run your courier business as a sole trader
• File a Self Assessment tax return
• Earn self-employed income above the relevant threshold

It can also matter if you have other income alongside courier work. HMRC looks at qualifying income from self-employment and property. That means if you have courier income and rental income, or more than one self-employed income stream, this could affect when you need to use Making Tax Digital.

If you run your courier business through a limited company, these Making Tax Digital for Income Tax rules are not aimed at your company profits in the same way. You may still have other tax, VAT or company reporting responsibilities, so check with your accountant if you are unsure.

When do couriers need to start using Making Tax Digital?

Making Tax Digital for Income Tax is being introduced in phases.

HMRC says you will need to use Making Tax Digital for Income Tax if your qualifying income is above the relevant threshold for the tax year. The current rollout is:

Qualifying income	Tax year used to assess you	MTD start date
Over £50,000	2024 to 2025	6 April 2026
Over £30,000	2025 to 2026	6 April 2027
Over £20,000	2026 to 2027	6 April 2028

This is based on qualifying income, not just profit.

For example, if your courier business brings in £52,000 before expenses, but your profit is lower after fuel, insurance, repairs and other costs, you may still be above the threshold.

HMRC says it will review Self Assessment tax returns and write to people who need to use Making Tax Digital, but it is still your responsibility to check whether you need to sign up.

What will couriers need to do differently?

Making Tax Digital is not just another Self Assessment deadline.

For courier sole traders, the biggest change is the way records are kept and submitted throughout the year.

1. Keep digital records

You will need to create and store digital records of your self-employment income and expenses.

For couriers, this could include:

• Courier job income
• Invoices issued
• Payments received
• Fuel or mileage records
• Van insurance
• Vehicle maintenance and repairs
• Tyres, servicing and MOT costs
• Parking, tolls and congestion charges
• Mobile phone and data costs
• Software or subscription costs
• Accountancy or bookkeeping fees

HMRC says digital records should include the amount, date and category of income or expense, and Making Tax Digital uses the same income and expense categories as Self Assessment.

The key change is habit. Instead of sorting receipts and invoices once a year, couriers will need a more regular way of keeping records up to date.

2. Send quarterly updates

Once you are signed up to Making Tax Digital, you will need to send quarterly updates to HMRC.

These are summaries of your business income and expenses. They are not full tax returns. HMRC says compatible software adds together your digital records every three months and sends totals for each income and expense category.

For couriers, this means your software will summarise the income and expenses you have recorded during that period.

3. Submit your tax return through software

You will still need to submit your tax return.

Making Tax Digital changes how your records are kept and how information is sent to HMRC, but it does not remove the need to finalise your tax position.

HMRC says compatible software will be used to submit your tax return and pay any tax due by 31 January the following year.

4. Use compatible software

You will need software that works with Making Tax Digital for Income Tax.

HMRC does not provide its own Making Tax Digital software. Instead, you need to choose software that can create digital records, send quarterly updates and submit your tax return.

Some couriers may choose full accounting software like Xero or Quickbooks. Others may prefer simpler bookkeeping tools or bridging software if they already use spreadsheets.

Can couriers still use spreadsheets?

Possibly, but a spreadsheet on its own will not be enough.

HMRC says that if you use spreadsheets to record income and expenses, bridging software can connect to them and make submissions to HMRC. This is sometimes called software that connects to your records.

That means some couriers may still be able to use spreadsheets as part of their process, but they will need the right software connection to make it work for Making Tax Digital.

For many owner-drivers, a bookkeeping app may be easier than trying to manage spreadsheets, receipts and bridging software separately.

What records should courier sole traders keep?

Good records already matter for Self Assessment. Making Tax Digital makes them even more important.

HMRC says self-employed people need to keep records of business income, business expenses, VAT records if registered for VAT, PAYE records if they employ people, personal income records and proof such as receipts, bank statements and sales invoices.

For couriers, useful records may include:

Income records

• Invoices issued
• Job income
• Payments received
• Statements from platforms or customers
• Any other self-employed income

Vehicle and travel records

• Fuel receipts
• Mileage logs
• Van insurance
• Vehicle finance or lease records
• Servicing and repairs
• MOTs
• Tyres
• ParkingTolls and congestion charges

Business running costs

• Mobile phone costs
• Data and internet costs
• Accounting software
• Bookkeeping or accountancy fees
• Courier platform or subscription costs
• Business banking charges
• Workwear or courier PPE, where allowable
• Training costs related to your courier business

For vehicle costs, HMRC says self-employed people may be able to use simplified expenses for mileage instead of working out actual vehicle costs, depending on their situation.

The right method depends on your business and how you use your vehicle, so it is worth checking with your accountant before changing how you claim.

How long should couriers keep records?

Making Tax Digital does not remove the need to keep records.

HMRC says self-employed people must keep records for at least five years after the 31 January submission deadline of the relevant tax year. HMRC may check your records to make sure you are paying the right amount of tax.

For couriers, that means it is not enough to submit the numbers and delete everything afterwards.

You should keep clear records of income, expenses, receipts, invoices and other business documents in case you need them later.

How Making Tax Digital could affect courier admin

Courier work moves quickly.

You might complete several jobs in a day, refuel on the road, pay for parking, pick up repair invoices, send PODs, chase payments and manage your diary all at once.

That makes it easy for admin to pile up.

Making Tax Digital could affect courier admin in a few ways:

• You may need to update your records more often
• You may need to use new software
• You may need to separate personal and business spending more clearly
• You may need to keep better mileage and expense records
• You may need to speak to your accountant earlier in the year
• You may have less room for last-minute record gathering before the Self Assessment deadline

For some couriers, this will feel like extra admin.

But it can also make your business easier to manage. Clearer records can help you understand your costs, spot missing payments, prepare for your tax bill and avoid a stressful January rush.

How to prepare for Making Tax Digital

You do not need to wait until the last minute.

Here are some practical steps couriers can take now.

Check your qualifying income

Start by checking whether Making Tax Digital applies to you, and when.

Look at your self-employed courier income and any property income. Remember, the threshold is based on qualifying income, not just profit.

If you are close to one of the thresholds, speak to your accountant or check HMRC guidance.

Speak to your accountant early

If you already use an accountant, ask them how they plan to support you with Making Tax Digital.

Useful questions include:

• Will I need to use MTD from 2026, 2027 or 2028?
• What software do you recommend?
• Can you submit updates for me?
• Should I change how I track expenses?
• Should I use mileage or actual vehicle costs?
• What do you need from me each month or quarter?

Do this early. Waiting until the first update is due could make the change more stressful.

Choose suitable software

You will need software that works for how you actually run your courier business.

Some couriers will want a full accounting platform. Others may want something simpler that can:

• Scan receipts
• Connect to a bank account
• Track invoices
• Record mileage
• Categorise expenses
• Send quarterly updates
• Support tax return submission

HMRC says software should be chosen before signing up for Making Tax Digital, and software options should be checked to make sure they meet your needs.

Build a weekly admin habit

A weekly admin routine can make Making Tax Digital much easier.

For example, every Friday or Monday you could:

• Upload receipts
• Check payments received
• Record mileage
• Match invoices to jobs
• Review expenses
• Check anything missing
• Update your bookkeeping software

This is far easier than trying to rebuild several months of courier work from bank statements and old receipts.

Keep courier paperwork organised

For couriers, tax records are closely linked to job records.

It helps to keep your:

• Jobs
• PODs
• Invoices
• Payments
• Expenses
• Mileage
• Customer records

as organised as possible.

The more scattered your records are, the harder Making Tax Digital will feel.

Common Making Tax Digital mistakes couriers should avoid

1. Assuming it only applies to VAT-registered businesses

Many people first heard about Making Tax Digital through VAT.

MTD for Income Tax is different. It affects sole traders and landlords who meet the relevant income thresholds, whether or not they think of themselves as a “large” business.

2. Waiting until January to sort everything

Self Assessment has trained many sole traders to think about tax once a year.

Making Tax Digital pushes record-keeping into the rest of the year. If you wait until January to sort everything, you may already have missed quarterly update deadlines.

3. Mixing personal and business spending

If fuel, food, personal shopping, van repairs and household spending are all mixed together in one account, bookkeeping becomes harder.

You do not always need a separate business bank account as a sole trader, but clear separation can make your records much easier to manage.

4. Losing fuel and maintenance records

Courier businesses often have high vehicle costs.

Fuel, servicing, repairs, tyres, insurance and other vehicle-related costs can be significant, so poor record-keeping can create problems later.

5. Forgetting mileage

If you use mileage-based simplified expenses, mileage records matter.

Do not rely on memory at the end of the year. Keep mileage records as you go.

6. Choosing software too late

Some software will feel more natural than others.

Do not leave it until the first deadline to test how it works. Try to choose a system you can use consistently, even when you are busy.

7. Assuming quarterly updates are tax returns

Quarterly updates are summaries, not full tax returns. HMRC says quarterly updates are not tax returns, and your tax return still needs to be submitted by the relevant deadline.

Making Tax Digital checklist for couriers

Use this as a starting point:

• Check whether your qualifying income is above the relevant threshold
• Confirm your MTD start date
• Speak to your accountant
• Choose compatible software
• Decide how you will track mileage or vehicle expenses
• Start recording income and expenses digitally
• Keep receipts, invoices and bank records organised
• Set a weekly admin routine
• Check quarterly update deadlines
• Keep records for the required period

Final thoughts

Making Tax Digital is a big shift for many sole trader couriers.

The main change is not just software. It is the move from once-a-year tax admin to regular digital record-keeping throughout the year.

For couriers, that means keeping better track of income, invoices, mileage, expenses and payments as you go.

The sooner you prepare, the easier the change will be. Check when the rules apply to you, speak to your accountant and start building simple admin habits now — before Making Tax Digital becomes something you have to deal with under pressure.

FAQs about Making Tax Digital for couriers