Making Tax Digital for driving instructors: the dates

Making Tax Digital for Income Tax is the biggest change to how a self-employed driving instructor reports earnings since self-assessment went online. It is already live for the highest-earning band, and it works its way down to almost every full-time instructor over the following two years.

This covers who it catches and when, what you have to send, the one mileage rule that catches driving instructors specifically, and how to get the numbers out of your diary.

Who it applies to, and when

HMRC tests you against your qualifying income — which is “your total income from self-employment and property. This is the amount before expenses (also known as turnover), based on the tax return you submitted in the previous tax year”. Fees you have already paid out as a franchise cost still count, because turnover is measured before anything is deducted.

Qualifying income	Tax year measured	You start using MTD from
More than £50,000	2024 to 2025	6 April 2026
More than £30,000	2025 to 2026	6 April 2027
More than £20,000	2026 to 2027	6 April 2028

For a driving instructor teaching at a typical UK hourly rate, a full diary passes £30,000 of turnover long before it passes £30,000 of profit. If you are teaching most weeks and taking your own bookings, plan for April 2027 rather than assuming the £20,000 band buys you until 2028.

Employment income, dividends, pensions and partnership profits do not count towards the figure. Neither does anything you earn through a school as an employee — if your lessons are booked, invoiced and collected by a school you work for, the school is the one filing on that revenue, not you.

Partnerships are excluded for now, and HMRC has said they will be brought in later.

What a quarterly update is

Four updates a year, on fixed dates that do not move with your accounting period.

Update period	Deadline
6 April to 5 July	7 August
6 April to 5 October	7 November
6 April to 5 January	7 February
6 April to 5 April	7 May, the following tax year

Two things about that table surprise people.

The first is that the periods all start on 6 April. They are cumulative: “each time you send a quarterly update it will cover from the start of the tax year to the end of the update period, not just the previous three months”. A mistake in your first quarter gets corrected by the second update rather than needing an amendment.

The second is how little goes to HMRC. An update carries “totals for each income and expense category” — nothing more. “HMRC will not receive details of individual digital records, such as a receipt or invoice.” Your obligation is to keep those records digitally and to be able to produce them; the quarterly filing itself is a short list of numbers.

In practice, the hard part is having a running, categorised record of every lesson payment and every business cost, ready on the 7th, four times a year.

The mileage trap for dual-control cars

This one is specific to driving instructors and almost every general “expenses for the self-employed” article gets it wrong.

HMRC’s simplified expenses let most sole traders skip actual running costs and claim a flat rate per business mile. From 6 April 2026 that rate is 55p for the first 10,000 miles and 25p after that (it was 45p and 25p before), with motorcycles at 24p.

Driving instructors are carved out. The gov.uk page says simplified expenses can be used for “cars (except those designed for commercial use, for example, black cabs, hackney carriages or dual control driving instructors’ cars)”.

So if you teach in a car with dual controls fitted, the flat rate is not available for that car. You claim the actual running costs instead — fuel, insurance, servicing, repairs, apportioned to business use — plus capital allowances on the car itself. That is more paperwork, and under MTD it is paperwork you now need kept quarterly rather than reconstructed once a year.

Two practical consequences:

• Keep the mileage record anyway. You still need it to apportion actual costs between business and private use, and a per-lesson distance log is far easier to defend than an estimate.
• If you run a second car without dual controls for admin trips, driving to test centres, or picking up parts, that one is not carved out and the flat rate is on the table for it. Track the two separately from the start.

The wider expenses picture — what else an instructor can claim, and where the capital allowance rules bite — is in our guide to allowable expenses for driving instructors.

Getting the figures out of Passdesk

Passdesk holds the two things a quarterly update needs: what learners paid you and what the business spent. The tax export turns that into files you can import into the HMRC-recognised software you file with.

Be clear about the boundary before you rely on it. Passdesk does not submit anything to HMRC and is not HMRC-recognised software. It produces the records; the filing happens in your filing tool. If you want one product that does both, that is a different purchase.

Step 1: open the tax export

Tax exports sits in your school workspace and opens on the current UK tax quarter, using the same 6 April boundaries HMRC uses.

Step 2: check the quarter

Confirm the period matches the update you are about to file. Each leg of the export is capped at 10,000 rows and the file carries a loud warning at the top if any leg hit that cap — if you see it, narrow the range and export again rather than filing a short figure.

Step 3: download the file for your software

If you file with Xero or FreeAgent, download its file. Each has one row per payment, refund and expense, dated and categorised, in the layout that software’s bank statement import expects. Import it into a separate account called Passdesk, so a payment that also shows in your bank feed can be matched as a transfer instead of counted twice.

The CSV lists every income row, every refund, every expense with its category, and a mileage line per vehicle type, then a summary block with gross income, total expenses, the flat-rate mileage claim and the net. Income covers lesson packages, deposits, no-show fees, late-cancellation fees and tips. JSON carries the same data for tools that read it. For a free bridging tool that reads a spreadsheet, pick Tax year so far as the period: quarterly updates carry the running total from 6 April.

The mileage line is split by vehicle. Miles recorded against a vehicle you have marked as having no dual controls get the simplified-expenses bands, priced at the rate in force on the day of each lesson: 45p for the first 10,000 miles before 6 April 2026, 55p from that date, and 25p once the band is used up. Miles in a dual-control car, or with no vehicle recorded against the lesson, are listed with no pound figure. HMRC does not allow the flat rate for those, so that line is your business-mileage record for apportioning actual costs, not a claim — work that claim out with your accountant. Mark each car’s dual controls correctly under Vehicles and the export keeps the two apart for you.

Step 4: import it and send the update

Import the file rather than retyping the figures. Once you’re in Making Tax Digital, records have to move between products by a digital link, such as importing a file, not by copying them across. Add anything Passdesk does not hold — a franchise fee paid outside the system, a vehicle lease, an accountant’s invoice — and your flat-rate mileage claim, which goes in your software’s own mileage feature because no money moved. Then send the update by the 7th.

A short checklist

If you do nothing else this quarter:

1. Work out your qualifying income from the tax return you last filed, and put your start date in the diary.
2. Move lesson payments into something that categorises them as they happen. Card payments and Direct Debit plans both land as categorised rows.
3. Start logging expenses with receipts attached.
4. Separate your dual-control car from any other vehicle in your records now, before a year of mixed mileage has to be untangled.
5. Pick your filing tool. MTD needs software at the submission end whatever you use for records.

We have put the same steps on one page you can print and stick in the glovebox.

Download the checklist (PDF)

This is a plain-English summary of published HMRC guidance, not tax advice. The rules on capital allowances and private-use apportionment turn on your own circumstances — the sources below are the primary pages, and an accountant is worth an hour of their fee here.