Making Tax Digital for sole traders and landlords with a gross income of over £50,000, came into force on 6 April 2026. This is the biggest shake up to self-assessment since it was launched 30 years ago. Those affected must keep digital records, send quarterly updates, and submit a final declaration through compatible software.
There has been a long lead-in to this change, but external commentary suggests many sole traders and landlords are still catching up with the practical changes; and if those affected haven’t yet chosen their software or changed their bookkeeping process, they may already be behind for the first quarter return on 7th August.
The biggest issue is that MTD for Income Tax is not just a new filing process, it is a process change. Those affected need software that can store and correct digital records, send quarterly updates, and complete the end-of-year filing. That means anyone still relying on manual records or year-end catch-up bookkeeping is likely to struggle unless they have already switched systems.
A second issue which may be affecting if businesses are ready, is scope confusion. Research suggests that many people still misunderstand that the threshold is based on gross income, not profit.
To be ready for 7th August, a sole trader or landlord should have already done the following:
- confirmed they are in scope for April 2026
- registered for MTD ITSA with HMRC
- chosen HMRC-compatible software
- moved their bookkeeping into digital records
- set up a routine for recording income and expenses during the quarter
- understood the reporting calendar and who will file the updates — them or their agent
If you need any support with MTD ITSA, please contact Siobhan as soon as possible.
