Making Tax Digital (MTD) rules will be extended to income tax from 6 April 2026. If you’re a sole trader or landlord earning above £50,000 annually, you’ll need to sign up ahead of the deadline.
What does Making Tax Digital mean for the self-employed?
Sole traders and landlords with an overall income above £50,000 need to have HMRC-recognised software in place before 6 April 2026. This is when the first phase of Making Tax Digital for Income Tax Self Assessment (ITSA) comes into effect. Those with income above £30,000 will be mandated from April 2027.
Instead of using HMRC’s website to file returns, you’ll need to keep digital records and use compatible software. From 6 April 2026, you’ll need to submit quarterly updates to HMRC, as well as a Final Declaration that includes all other taxable income by 31 January every year.
When does MTD start for the self-employed?
For sole traders and landlords earning above £50,000 annually, MTD for ITSA starts from April 2026.
For sole traders and landlords earning above £30,000 annually, MTD for ITSA will start from April 2027.
All self-employed people and landlords with a total income (from business or property) above £50,000 will need to follow MTD rules for ITSA from 6 April 2026. Sole traders and landlords earning above £30,000 will follow in 2027.
Sole traders earning below the threshold can continue to use the old HMRC system for filing their returns. If you own multiple businesses, the income earned from all of them contributes to the £50,000 threshold.
How do I sign up for Making Tax Digital for ITSA?
Signing up for MTD for ITSA requires that you have HMRC-recognised software in place first. That’s because you need to sign up to MTD for ITSA through your cloud-based software, instead of on the HMRC website.
Make sure you have HMRC approved software in place and ask your software provider how to sign up for MTD for ITSA. You’ll also need your business name, business start date, email address, National Insurance number, accounting period, and accounting type to apply. Read HMRC’s guidance on signing up for more information.
We would recommend using Xero as your software. It’s super user friendly!
What do I need to submit for MTD for ITSA?
From 6 April 2026, self-employed people and landlords earning above £50,000 will need to keep digital records of income and expenditure. There are two parts you’ll need to submit for MTD for ITSA:
Quarterly updates. These should include all business income and expenditure.
Final Declaration. This is where you’ll need to share details of all other taxable income, including investments and savings interest.
Can an accountant or bookkeeper sign a sole trader up for MTD for ITSA?
Yes. Speak to your accountant or bookkeeper about signing up for MTD for ITSA early, so you have plenty of time to familiarise yourself with the system.
Your accountant can submit your quarterly updates and Final Declaration using your cloud-based accounting software. We are more than happy to help!
If you would like to us Amica Accounting for support on MTD for Sole Traders, please email us to email@example.com!