Making Tax Digital for sole traders: what changes and when
Updated 7 October 2026 · 2026/27 tax year
Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords keep records and report to HMRC. Instead of one tax return a year, you keep digital records and send a short update every three months. Here's what it means for a tradesperson.
When it starts for you
It depends on your qualifying income: your self-employed turnover plus any rental income, before costs. Wages from a job don't count. HMRC looks at your tax return from two years earlier.
- Over £50,000: from 6 April 2026 (based on your 2024/25 return)
- Over £30,000: from 6 April 2027 (based on 2025/26)
- Over £20,000: from 6 April 2028 (based on 2026/27)
Below £20,000, you carry on with a normal tax return for now. You can join early if you like.
What you'll have to do
- Keep your income and costs in software that works with MTD, not just a spreadsheet you type up later
- Send HMRC a quarterly update for each three months of the tax year: by 7 August, 7 November, 7 February and 7 May
- After the year ends, send a final declaration by 31 January, which replaces the tax return
What's in a quarterly update
Just totals: your income and your costs in HMRC's categories for the year so far. It isn't a tax bill, and you don't pay anything with it. HMRC uses it to show you an estimate of what you'll owe.
How to get ready
- Check whether and when it applies to you with our free MTD checker
- Start keeping records digitally now, so the first quarter isn't a scramble
- Keep receipts as you go: snap them or forward the emails
- Use software that sends the updates for you
This guide is general information, not tax advice. Check HMRC's guidance or ask an accountant about your own situation.