Making Tax Digital (MTD) for Income Tax changes how many sole traders and landlords keep records and report to HMRC. This guide covers the admin side. For tax advice, speak to your accountant.
Who it affects and when
According to GOV.UK, MTD for Income Tax applies to sole traders and landlords with qualifying income:
- over £50,000, from 6 April 2026
- over £30,000, from 6 April 2027
The government has also set out plans to bring in people with qualifying income over £20,000 from April 2028. Check HMRC's latest guidance for your situation.
What changes
Instead of one tax return a year, you keep digital records and send quarterly updates to HMRC using compatible software, then finalise the year at the end. Paper records and shoeboxes of receipts won't cut it any more.
Getting your admin ready
- Choose MTD-compatible software. Your accountant may have a preference, and HMRC publishes a list.
- Keep business transactions in a separate bank account and connect it to your software.
- Photograph receipts as you go, rather than at the end of the quarter.
- Set a monthly reminder to tidy up transactions, so each quarterly update takes minutes.
- Agree with your accountant who submits the updates.
Where we help
We don't give tax advice. We can set up and connect your software, organise your records and keep the routine admin up to date, so your accountant gets clean information every quarter.