f you are self-employed, a sole trader, freelancer or landlord, you may have received a letter from HMRC about Making Tax Digital (MTD) for Income Tax. We have also notified clients about this.
Starting from April 2026, MTD for Income Tax is the new way many sole traders and landlords will report tax.
The first phase of MTD comes into affect from April 2026.have already entered some clients into a pilot scheme
from April 2026 for those with qualifying income over £50,000
from April 2027 for those with qualifying income over £30,000
from April 2028 for those with qualifying income over £20,000
You will not have to comply until you hit the relevant threshold - but it pays to get prepared as soon as you can.
Qualifying income is: your sales before costs or expenses are deducted for sole traders, and your rental income for landlords.
If you have qualifying income from multiple sources - for example if you are self-employed and also rent out a property you own - you have to combine all your sources of qualifying income
You must use MTD-compatible software that’s officially recognised by HMRC, (We use FreeAgent, Xero and Quickbooks) to file your quarterly updates online and to send your final declaration each year
We will be making four quarterly returns containing your self employment and property income.. HMRC will update your tax position in real time. Then we will submit a final declaration to contains income such as employment, pensions and investment income.
