Compare MTD accountants for Preston’s drivers and sole traders

Transport is the biggest single trade among Preston’s VAT or PAYE-registered sole traders: 115 of them, or about one in six, where the North West figure is one in nine. The group includes taxi and private hire drivers, couriers and hauliers, and for them Making Tax Digital changes the rhythm of the year more than the sums.

What counts towards the threshold is everything you take before costs. Fuel, insurance, the licence, the car payments and any app or radio-circuit fees are expenses: they reduce your profit, not your turnover. If you work through an app, check with your accountant which figure on the statement is your turnover, because it decides whether you are in.

The city has 6,130 businesses and 110 accountancy, bookkeeping and tax firms, a high number for its size, which fits its role as the home of Lancashire County Council. The ONS survey estimate of self-employment is low, at about 7.5% of people in work against 11.8% for the region, but its margin is plus or minus 4.3 points, so read it as a rough guide.

Renting is a bigger part of life here than across most of Lancashire. At the 2021 Census 22.4% of households, 13,333 of them, rented from a private landlord, above the North West’s 19.2%; the University of Central Lancashire’s city-centre campus adds student lets to the mix. Rent counts towards the Making Tax Digital threshold in the same way as fares, so a driver with a couple of lets can cross £30,000 sooner than they think. Our landlord guide covers joint ownership.

Since 4 April 2022, anyone in England and Wales renewing a taxi, private hire driver or private hire operator licence has had to complete a tax check with HMRC first. Preston’s licences are issued by Preston City Council, so this applies to drivers licensed here.

The check is done online. HMRC gives you a 9-character tax check code, valid for 120 days, which you give to the council with your renewal. It does not calculate anything; it confirms you are registered for tax on your taxi or private hire income. First-time applicants do not need one, but will be asked about their tax responsibilities.

Making Tax Digital does not change the tax check, but the two now sit side by side. If you are signed up for Making Tax Digital and sending your quarterly updates, the registration side of the check should be straightforward. If you have fallen behind, it is better to sort that out before the renewal date, not the week the badge expires.

Take a private hire driver who covers 12,000 business miles in the 2026 to 2027 tax year in a car. Using the flat rates, the first 10,000 miles are claimed at 55p each, which is £5,500, and the remaining 2,000 at 25p, which is £500. That makes £6,000 in total for the year, without keeping a single fuel receipt.

The same driver could instead claim the actual costs: fuel, insurance, servicing, tyres, the vehicle licence, and capital allowances on the car itself, all reduced by the share of private use. Which is better depends on the car. A cheap, economical car often does better on the flat rate; an expensive vehicle with high running costs often does better on actual costs.

Drivers often have three kinds of income going in at once: fares paid in cash, fares paid by card in the cab, and jobs booked through a radio circuit or an app. Each needs to end up in your digital records, and the easiest way is to treat each payment route as its own line in the software.

For app and circuit work, use the weekly or monthly statement as your record, and make sure you record what passengers paid as well as any commission or circuit fees taken off, because those fees are expenses. Booking and delivery apps also report their drivers to HMRC under the digital platform rules, whatever they earn, so the income you record should match theirs. For cash, a simple daily total, kept as you go, is far easier than trying to rebuild a quarter from memory.

Delivery work comes in different shapes. A courier who is paid per drop, invoices the courier company or is paid through an app, and covers their own van costs is usually self-employed, and that income counts for Making Tax Digital. A driver taken on as an employee, or paid through an agency or umbrella company under PAYE, is not self-employed for those hours, and that pay does not count.

Plenty of people do both: a PAYE job in a warehouse and self-employed delivery rounds on top. Only the self-employed side is added up for the threshold. If you are not sure which side of the line some work falls, ask the company how it treats you, and check with an accountant before your first update.

The drivers who find Making Tax Digital easiest are the ones who set a fixed slot each week. Download the app or circuit statements, enter the week’s cash total, check that the mileage log has synced, and photograph any receipts for parts or cleaning. That is usually under an hour, and it means each quarterly update is a few clicks rather than a scramble.

If you are buying or replacing a car, electric or hybrid, talk to an accountant before you buy. Whether to claim the flat mileage rate or capital allowances on the vehicle is a choice you make per vehicle and then live with while you use it, so it is worth getting right at the start.

With 110 accountancy, bookkeeping and tax firms and a relatively low self-employment rate, Preston has more accountants per self-employed person than most places in the region: roughly 47 for each firm, by our calculation from the ONS figures. That is good news if you are a driver looking for help, because firms will be competing for clients.

Ask whether a firm already looks after taxi and private hire drivers or couriers, whether it can work from your app statements and mileage log, and whether its fee covers both your driving and any rental property. A firm that knows drivers will already have answers to the vehicle questions on this page.

With the University of Central Lancashire’s campus on the edge of the city centre, a good share of Preston’s private rented homes are let to students, often as shared houses. For Making Tax Digital the same rules apply as for any other let: the rent, before costs, counts towards the threshold, and the property business sends its own quarterly updates.

Shared houses tend to have more moving parts than a single family let: room-by-room rents, bills included in the rent, summer gaps between tenancies, and letting agent fees. Recording each room’s rent as it arrives, and each bill as it is paid, keeps the quarterly figures accurate. Agent fees, repairs, insurance and the bills you pay are expenses; they reduce your profit but not the turnover that decides whether you are in.