From April 2026, most sole traders and landlords earning over £50,000 will have to use MTD for Income Tax.

Strong financial foundations won’t guarantee success, but weak ones almost always create barriers.

Making Tax Digital represents a significant shift for sole traders and landlords.

Under the new rules, individuals who exceed certain income thresholds will need to keep digital accounting records and submit quarterly updates of income and expenses to HMRC, followed by a final declaration.

The final declaration will effectively replace the Self-Assessment Tax Return.

When MTD will apply:

- From 6 April 2026 for individuals with combined self-employment and/or property income over £50,000

- From 6 April 2027 for those above £30,000

- From 6 April 2028 for those above £20,000

(Threshold based on figures submitted in the relevant prior tax return.)

Key considerations:

- MTD applies only to individuals, not partnerships

- For jointly owned property, each owner’s share is assessed separately

Core support includes:

Accurate day-to-day bookkeeping to support management and year-end reporting
Full reconciliation of all balance sheet and control accounts
Xero setup, training and support, including integration with add-ons
Preparation and submission of VAT returns
Credit control and debt management
Supplier payment lists and scheduling support

Quarterly periods and filing deadlines:

6 April to 5 July - 7 August
6 April to 5 October - 7 November
6 April to 5 January - 7 February
6 April to 5 April - 7 May

To comply, you will need to use approved software to maintain digital records and submit quarterly information on time.

As bookkeeping specialists, we can help you prepare for MTD, choose suitable software and manage your submissions efficiently.

Get in touch now to discuss your options and to make sure you a well-placed for this important change in managing your accounts.

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Making Tax Digital (MTD)