Introduction
From April 2026, the way sole traders report income to HMRC is changing. To put it simply, if you’re earning over £50,000 a year, you will need to submit quarterly updates under MTD for Income Tax Self-Assessment.
What’s more, in addition to sole traders, landlords earning over £50,000 a year from property will also fall under the scope of MTD for Income Tax and, as a result, will need to follow the same quarterly reporting process.
Read on to learn what this means and how to prepare.
What is MTD for Income Tax?
MTD for Income Tax is HMRC’s plan to digitise the tax system, aiming to reduce errors, improve efficiency, make tax reporting more transparent.
To achieve this, firstly, you would use compatible accounting software to keep digital records. In addition quarterly updates would need to be submitted. Finally, you’ll be required to send a declaration at the end of the tax year—similar to the process many VAT-registered businesses follow now.
Who Will Be Affected?
From April 2026, Making Tax Digital will apply to:
- Sole traders, in the UK, with income over £50,000 per year will need to comply with MTD for Income Tax.
- Similarly, landlords in the UK with property income of more than £50,000 per year.
However, if your earnings fall below £30,000, there is no immediate change – at least for now. Nevertheless, it’s good to start preparing early.
How to Prepare
Here are some steps you can take now:
- Start by keeping digital records of income and expenses, saving receipts & bills and other supporting documents relating to your business.
- Next, begin ummitting quarterly updates to HMRC using approved software.
- Finally, be ready to send a declaration at the year-end— similar to a simplified tax return.
Remember, HMRC will expect you to use approved accounting software to meet these requirements.
Need Help?
Got questions about MTD for ITSA? Get in touch here for personalised support.
Here at Bletchley Bookkeeping, we help sole traders, creatives and consultants stay organised and compliant.
If you would like support with MTD, quarterly reporting, or just want to get ahead – I am here for you on your journey.
Book a free, no obligation discovery call.