HMRC is changing the way many people report their income. If you’re a sole trader or landlord, this will likely affect you in the next few years.
Here’s what you need to know — in plain English.
What is Making Tax Digital (MTD)?
Making Tax Digital is HMRC’s plan to modernise the tax system.
In simple terms, if you fall within the rules, you will need to:
- Keep digital records of your income and expenses
- Send updates to HMRC using approved accounting software
Many VAT-registered businesses already do this. The next stage is called MTD for Income Tax.
Who Will Be Affected — and When?
MTD for Income Tax applies to:
- Sole traders
- Landlords
Whether you must join depends on your gross income (before expenses) from:
- Self-employment (trading income), and/or
- UK rental income
The start dates are:
- From 6 April 2026 if your income is over £50,000
- From 6 April 2027 if your income is over £30,000
- From 6 April 2028 if your income is over £20,000
The income test looks at previous tax years. We can help you check exactly when you will fall into scope.
What Will You Actually Have to Do?
If MTD applies to you, you will need to:
- Keep digital records of your income and expenses
- Submit updates to HMRC every quarter (four times a year)
- Complete a year-end finalisation process
Important:
Quarterly updates are not tax bills. They are simply updates so HMRC can track your income during the year. Your final tax position is still confirmed after the year ends.
What Does This Mean in Practice?
For many people, this means:
- Moving away from paper records or basic spreadsheets
- Using proper accounting software
- Keeping records up to date throughout the year
The days of leaving everything until January may soon be over.
How We Can Help
We can support you at every stage, including:
- Confirming whether and when MTD applies to you
- Handling quarterly submissions
- Completing the year-end submissions
- Helping you build a simple, stress-free system
Our aim is to make this transition smooth — not overwhelming.
What Should You Do Now?
You don’t need to panic — but you shouldn’t ignore this either.
If you are a sole trader or landlord, it’s sensible to check your position early and plan ahead.
If you would like us to review your situation and map out a clear transition plan, feel free to get in touch.
The earlier you prepare, the easier this will be.