Compliance
Compliance Guide: What Sole Traders & Landlords Must Do for MTD from April 2026
Making Tax Digital for Income Tax becomes mandatory from 6 April 2026 for sole traders and landlords with qualifying income over £50,000—here’s how to comply seamlessly.
By NomadicTax Research Team • 5-8 min read • April 14, 2026
## What is Making Tax Digital for Income Tax (ITSA)?
Making Tax Digital (MTD) for Income Tax is a UK government initiative requiring individuals with **self-employment income and/or property income over certain thresholds** to keep digital records and send quarterly updates to HMRC using compatible software.([gov.uk](https://www.gov.uk/government/collections/making-tax-digital-for-income-tax?utm_source=openai))
## Key dates & thresholds
- **From 6 April 2026**: Individuals with combined self-employment and property income (gross before expenses) **above £50,000** must comply.([gov.uk](https://www.gov.uk/government/collections/making-tax-digital-for-income-tax?utm_source=openai))
- **From 6 April 2027**: Threshold drops to **£30,000**.([gov.uk](https://www.gov.uk/government/statistics/making-tax-digital-for-income-tax-business-population-statistics/making-tax-digital-for-income-tax-business-population-statistics-commentary?utm_source=openai))
- **From 6 April 2028**: Threshold lowers further to **£20,000**.([gov.uk](https://www.gov.uk/government/statistics/making-tax-digital-for-income-tax-business-population-statistics/making-tax-digital-for-income-tax-business-population-statistics-commentary?utm_source=openai))
## What compliance involves
- Maintain **digital records** of income and expenses for eligible sources.
- Send **quarterly updates** to HMRC summarising those records. These are NOT full returns but summary data.([gov.uk](https://www.gov.uk/guidance/get-ready-for-mtd-an-agent-toolkit/understanding-making-tax-digital-for-income-tax?utm_source=openai))
- Continue to submit the full Self Assessment return by 31 January following the tax year.
- Use software compatible with MTD for Income Tax. It must be able to store data digitally, correct it, and connect securely to HMRC.([gov.uk](https://www.gov.uk/government/collections/making-tax-digital-for-income-tax?utm_source=openai))
## Penalties and easing periods
- Penalties for missing quarterly updates will **not be applied in the 2026–27 tax year**, giving a grace period for compliance.([gov.uk](https://www.gov.uk/guidance/get-ready-for-mtd-an-agent-toolkit/understanding-making-tax-digital-for-income-tax?utm_source=openai))
- HMRC will notify eligible taxpayers based on their previous years’ qualifying income—so check your income history to see when you need to start.([gov.uk](https://www.gov.uk/guidance/check-when-to-sign-up-for-making-tax-digital-for-income-tax?utm_source=openai))
## Actionable steps for stakeholders
- **Self-employed individuals and landlords** should assess whether their 2024–25 income exceeds £50,000. If so, begin preparing now.
- **Agents/accountants/bookkeepers** should make sure they have software clients recommend or use HMRC-recognised tools.
- Keep **clean, organised records** (invoices, receipts, rental contracts)—digital storage is essential.
- Plan for quarter-end submissions: create workflows to gather and update data weekly or monthly to avoid last-minute crunch.
- Attend HMRC webinars or use agent toolkits for guidance.([gov.uk](https://www.gov.uk/guidance/help-and-support-for-making-tax-digital?utm_source=openai))
## Example scenario
Sarah is a landlord with gross rental income of £60,000 per year and minimal expenses. Beginning 6 April 2026, she must:
1. Sign up for MTD for ITSA.
2. Use software to store records of income and expenses.
3. Submit quarterly summaries on income and expense totals.
4. Still file a Self Assessment return by 31 January 2028 for tax year 2026/27.
If Sarah delays or fails to send quarterly summaries, in the first enforcement year she’ll likely avoid penalty but not indefinitely—compliance is now expected.
## Why this matters
- Greater transparency: HMRC will have near real-time visibility into income and profitability, reducing errors and under-reporting.
- Time saving in the long term, though there is initial effort setting up software and processes.
- Those who are proactive avoid compliance risk and potential financial penalties later.
Stay ahead of the 2026 deadlines—invest in software, professional help if needed, and build good record-keeping routines now to avoid headaches later.