Digital Nomad
How New UK MTD Rules Impact Sole Traders & Landlords: Planning Ahead for April 2028
From April 2028, sole traders and landlords with trading or property income over £20,000 will join the Making Tax Digital regime—learn what this means, how to prepare, and what exemptions or changes to expect.
By NomadicTax Research Team • 5-8 min read • November 21, 2025
## What Is Changing Under Making Tax Digital (MTD)
The UK government has confirmed that from **6 April 2028**, **sole traders and landlords** with trading or rental income exceeding **£20,000** must file via MTD for Income Tax Self Assessment. Relevant policy details include: exemptions or deferral for certain taxpayer categories, improved software for the end-of-year Final Declaration, and alignment of digital tools for tax submissions. ([gov.uk](https://www.gov.uk/government/publications/modernising-the-tax-system-through-making-tax-digital?utm_source=openai))
## Why It Matters
- Smaller businesses and landlords below the threshold currently use the traditional Self-Assessment return; this change increases digital obligations.
- **Errors and late filing** penalties will increase misreporting risk.
- Requires investment in **compatible software** and digital record-keeping from now.
## Planning Steps for Affected Individuals
1. **Check whether your income qualifies**: If your trading plus property income > £20,000, you are subject. If less, you may still opt-in or await further guidance.
2. **Choose compliant accounting software**: Look for software that integrates well with HMRC’s APIs and supports Final Declaration processes.
3. **Update record keeping**: Digital records must be up to date from Day One. Keep business and personal finances clearly separated.
4. **Seek exemptions or deferrals**: Some special cases (seasonal income, unpredictable earnings) may qualify. Monitor HMRC updates.
## Practical Example
*Sarah* runs a small holiday-let and also sells crafts occasionally online. In tax year 2027-28, her holiday-let income is £15,000, crafts trade £8,000: **£23,000** combined. From April 2028, she must keep digital records, submit via MTD software, and meet new penalty risk. If her crafts income drops to £15,000 in a future year, she could be below threshold, but record-keeping standards still help.
## Risk Mitigation & Best Practices
- **Budget for software & training**: Early adoption gives you time to test systems.
- **Automate invoicing and expenses**: Use digital tools for receipts, expense categorisation, even for small items.
- **Review past Self Assessment practices**: Bring your existing returns into alignment with digital accounting.*
## Exemptions & Deferral Options
Some taxpayers may be able to defer or be exempt, such as those with limited income, unpredictable revenue, or whose costs of compliance are disproportionately high. Specific criteria will be set out by HMRC ahead of the April 2028 start date. Monitoring HMRC’s guidance is crucial.
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**Takeaway**: If you're a sole trader or landlord expecting combined income from trade and property over £20,000, the shift to digital filing isn't optional from April 2028—start preparing now to avoid scrambling later.
**Category**: Digital Nomad | Tax Planning