Franchise fees or going independent, the dual-control car as your defining asset, fuel and block-booked lessons. Here's how Making Tax Digital for Income Tax applies to approved driving instructors, and when it starts.
MTD for Income Tax phases in by gross income before expenses. Many instructors sit between £30,000 and £50,000, so it's worth pinning down your wave.
Whether you lease or buy, the car is your biggest single cost, alongside fuel and any franchise fee. How you claim it depends on your method, so keeping the paperwork tidy makes your quarterly updates straightforward.
When you're in scope, your annual Self Assessment return is replaced by four short quarterly updates and a year-end final declaration, all through recognised software.
Keep block bookings organised so prepaid lessons land in the right quarter.
The biggest difference for your records is whether you pay a franchise fee or source your own pupils. Start with the guide that fits how you work.
Your income and costs are simple once they're recorded as you go. Clear Books keeps them tidy and gives HMRC exactly what MTD needs, whenever you're in scope.
Record lessons, the car and any franchise fee as you go, watch your gross against the thresholds, and be ready to submit when your wave lands.
