Digital Tax Is Coming: A Timeline for Sole Traders and Landlords
A Quick Guide for Sole Traders & Landlords
The government is pressing ahead with its digital transformation of the UK tax system. Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) is being rolled out in stages, and over the next few years, it will affect millions of sole traders and landlords. If you're self-employed or earn rental income, it’s vital to understand how and when this change affects you.
Key Changes and Timeline:
🔹 April 2026 – MTD will apply to sole traders and landlords earning over £50,000.
🔹 April 2027 – The threshold will lower to include those earning over £30,000.
🔹 April 2028 – All self-employed individuals and landlords earning over £20,000 will be required to comply.
What Will You Need to Do?
✅ Keep digital records of income and expenses
✅ Submit quarterly updates to HMRC using MTD-compliant software
✅ File an End of Period Statement (EOPS) and a Final Declaration annually
What This Means for You
If you’re a sole trader or landlord above the income threshold, you’ll no longer be able to file a paper return or use the traditional online Self Assessment system. Instead, you’ll need HMRC-approved software to report your income and expenses digitally throughout the year.
Get Ready Now
MTD is designed to improve accuracy and reduce tax errors, but it also means a shift in how you manage your finances. Whether you're over the threshold now or will be in future years, it’s a good idea to:
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Review your current record-keeping methods
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Speak to your accountant or tax advisor
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Start exploring MTD-compliant software
Staying ahead of the changes now will save time and stress later.
Disclaimer
The content of this blog is provided for general information purposes only and should not be treated as tax, accounting, legal or financial advice. Tax rules, accounting requirements, legislation, regulations and official guidance can be complex and may change over time. As a result, some information in this article may become outdated, incomplete or no longer applicable after the date of publication.
The application of any tax, accounting or legal rule will depend on your individual or business circumstances. Before making any decision or taking any action based on the information in this article, you should seek advice from a suitably qualified tax professional, accountant, solicitor or financial adviser.
Gondal Accountancy and its staff accept no responsibility or liability for any loss, action taken, or decision made or not made as a result of relying on the information contained in this blog.
