Digital Nomad
How to Navigate Making Tax Digital for Income Tax: What Solo Traders & Landlords Must Do
Starting 6 April 2026, many sole traders and landlords will have new digital obligations under Making Tax Digital (MTD). Learn what qualifies, when you’re in scope, and how to prepare efficiently.
By NomadicTax Research Team • 5-8 min read • April 28, 2026
## What is Making Tax Digital (MTD) for Income Tax?
From 6 April 2026, sole traders and landlords with **gross income over £50,000** from self-employment and/or UK property must use compatible software to keep digital records and submit **quarterly updates** to HMRC, rather than relying solely on the annual Self Assessment return. ([gov.uk](https://www.gov.uk/government/publications/update-notice-for-making-tax-digital-for-income-tax?utm_source=openai))
If your qualifying income falls to over £30,000 in a later year, you’ll be in scope from April 2027, and over £20,000 from April 2028. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6807527fe16c376084e7c751/making-tax-digital-for-income-tax-agent-toolkit.pdf?utm_source=openai))
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## Who Counts as a “Relevant Person” and Who’s Exempt
**In scope:**
- Individuals who run a trade or business as a sole trader; or own or rent out UK property.
- Combined gross income (before expenses/tax) from these sources over £50,000 “</br>”
**Exemptions & not in scope yet:**
- Partnership profits received as a partner don’t count toward the “qualifying income” threshold, though separate rules apply. ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai))
- You can volunteer even if under threshold. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6807527fe16c376084e7c751/making-tax-digital-for-income-tax-agent-toolkit.pdf?utm_source=openai))
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## Key Deadlines & What You Need to Do
| Task | By When |
|------|----------|
| Start keeping **digital records** | From 6 April 2026 (standard accounting period) / 1 April 2026 (calendar) ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/before-you-use-this-guide?utm_source=openai)) |
| Submit **first quarterly update** | By 7 August 2026 ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/before-you-use-this-guide?utm_source=openai)) |
| Continue quarterly updates | By 7 Nov, 7 Feb, 7 May 2027 respectively |
| Submit full return & pay tax | By 31 January 2028 using compatible software |
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## Actionable Steps to Prepare Now
- Review your latest Self Assessment return to check if gross income exceeds £50,000. If yes, do not wait—prepare. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6807527fe16c376084e7c751/making-tax-digital-for-income-tax-agent-toolkit.pdf?utm_source=openai))
- Update to MTD-compatible accounting software. Ensure it supports quarterly updates, has bank-feed capabilities, and safely stores digital records. ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai))
- Keep separate digital records for property and business income. Be clear on mixed-use assets or shared property. ([gov.uk](https://www.gov.uk/business-relief-inheritance-tax/what-qualifies-for-business-relief?utm_source=openai))
- Understand the new penalty regime: it's point-based for missed submissions, escalating to financial penalties. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6807527fe16c376084e7c751/making-tax-digital-for-income-tax-agent-toolkit.pdf?utm_source=openai))
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## Example Scenario
**Sam** is a landlord earning **£60,000/year gross rent** and runs a side business with **£10,000 gross revenue**. Combined gross income = **£70,000**, above the £50,000 threshold. From April 2026, Sam must: keep digital records, send four quarterly updates, and then submit the full return early 2028.
**Alternatively:**
**Anna**, who earns **£25,000** from letting and **£20,000** from freelance writing (total £45,000), is **not in scope until April 2027** (when threshold drops to £30,000). She may opt in voluntarily.
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## Benefits & Common Pain Points
**Benefits:**
- Spreads out reporting through year → less last-minute stress.
- More up-to-date financial picture.
- Potential for fewer errors and fewer surprises when the annual return is due.
**Challenges:**
- Finding software that meets HMRC compatibility and cost.
- Learning curve for quarterly updates.
- Ensuring accurate separation between qualifying and non-qualifying income.
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## Final Tips
- **Start early**—don’t wait until April.
- **Maintain receipts & records digitally**—scanning, storing, timestamping helps.
- **Talk to your accountant or agent** about how to adapt workflows.
- **Watch for HMRC communications**, especially if you're approaching threshold—there may be further guidance or official letters.
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Making Tax Digital for Income Tax is a big shift—but with early planning and the right tools it can reduce stress, improve accuracy, and help you stay compliant without last-minute scrambling.