Making Tax Digital for Income Tax: what sole traders need to do

What is changing

Making Tax Digital (MTD) for Income Tax changes how many sole traders and landlords report to HMRC. Instead of one annual return built from paper records, you keep digital records and send short quarterly updates through compatible software, then finalise the year as before.

Who it affects, and when

• From 6 April 2026: sole traders and landlords with qualifying income over £50,000.
• From 6 April 2027: qualifying income over £30,000.
• The government plans to lower the threshold to £20,000 after that.

Qualifying income is your total income from self-employment and property, before expenses. Check HMRC's guidance on GOV.UK for your own position.

What you need to do

1. Check whether your qualifying income is over the threshold.
2. Choose MTD-compatible software, if you don't already use it.
3. Keep your records digitally as you go, not at the end of the year.
4. Send quarterly updates on time.

How we help

We keep your records digital, reconciled and up to date every month, so the information for each quarterly update is ready when it's due.

Source: Business Wales: Making Tax Digital 2026; see also HMRC's guidance on GOV.UK.

This guide is general information, not advice for your circumstances. Last reviewed: October 2026.