MTD Has Started: Do You Know What You Need to Do?

Making Tax Digital, also known as MTD, is now here for many sole traders, self-employed people and landlords.

This is a major change in the way income and expenses are recorded and reported to HMRC. It means that many people will need to keep digital records, use MTD-compatible software and send updates to HMRC during the year.

MTD is not just about submitting a tax return. It is about keeping your records up to date throughout the year.

Who does this affect?

MTD for Income Tax will apply in stages.

From 6 April 2026, it applies to sole traders and landlords with qualifying income over £50,000.

From 6 April 2027, it applies to those with qualifying income over £30,000.

From 6 April 2028, it applies to those with qualifying income over £20,000.

What does qualifying income mean?

Qualifying income usually means your total income before expenses.

For sole traders, this means your business turnover.

For landlords, this means your rental income before expenses.

If you have both self-employment income and rental income, HMRC may add them together.

For example, if you have £30,000 from self-employment and £25,000 from rental income, your total qualifying income would be £55,000.

This means you may need to follow the MTD rules from the relevant start date.

What will you need to do?

If MTD applies to you, you will need to:

Keep digital records of your income and expenses.

Use MTD-compatible software.

Send quarterly updates to HMRC.

Finalise your tax position after the end of the tax year.

Pay any tax due by the usual deadline.

The main Self Assessment payment deadline remains 31 January.

What are quarterly updates?

Quarterly updates are summaries of your income and expenses sent to HMRC during the year.

They are not full tax returns.

You will still need to finalise your tax position after the end of the tax year.

The quarterly update deadlines are:

6 April to 5 July
Deadline: 7 August

6 April to 5 October
Deadline: 7 November

6 April to 5 January
Deadline: 7 February

6 April to 5 April
Deadline: 7 May

Why should you act now?

MTD can be difficult if your records are not organised.

If you currently use paper records, spreadsheets, bank statements or manual notes, now is the time to review your system.

Waiting until the deadline may cause stress, mistakes and unnecessary delays.

Getting ready early means your records can be kept properly from the start.

Do you know what you need to do?

If you are self-employed, a sole trader, landlord or business owner, you should check whether MTD applies to you.

You should also make sure your bookkeeping system is ready.

This includes checking your income level, choosing suitable software and keeping your records updated regularly.

How Gondal Accountancy can help

Gondal Accountancy can help you understand whether MTD applies to you and what steps you need to take.

We can assist with:

Checking your qualifying income.

Setting up MTD-compatible software.

Moving your records to a digital system.

Keeping your bookkeeping up to date.

Preparing and submitting quarterly updates.

Completing your final tax return.

Advising you on tax deadlines and payments.

Final note

MTD has started, and more sole traders, self-employed people and landlords will be affected over the next few years.

The sooner you prepare, the easier it will be to stay compliant.

Self-employed, sole trader or business? Make sure your records are ready.