Digital Nomad

Making Tax Digital (MTD) for Income Tax: What Sole Traders & Landlords Need to Know by April 2026

A major reform mandates that self-employed individuals and landlords with income above £50,000 adopt digital record keeping and quarterly reporting — here’s how to prepare

By NomadicTax Research Team • 5-8 min read • April 12, 2026

## Overview The UK government is rolling out **Making Tax Digital (MTD) for Income Tax** in phases. From **6 April 2026**, sole traders and landlords with **qualifying income over £50,000** from self-employment and property will be required to use MTD-compatible software, maintain digital records, send quarterly updates, and submit returns digitally. ([gov.uk](https://www.gov.uk/government/news/one-year-until-making-tax-digital-for-income-tax-launches?utm_source=openai)) If your income from self-employment and/or property is above **£30,000**, the requirement kicks in from **6 April 2027**; and for those with income over **£20,000**, from **6 April 2028**. ([gov.uk](https://www.gov.uk/government/news/one-year-until-making-tax-digital-for-income-tax-launches?utm_source=openai)) --- ## Who is in Scope? - Must be registered for **Self Assessment** - Receive income from **self-employment or property** (or both) — qualifying income is gross income **before expenses or deductions** ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/introduction?utm_source=openai)) - **Exclusions/exemptions** include individuals who are digitally excluded, or where partnerships profit shares are involved (profit share does *not* count towards the qualifying income threshold) ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai)) --- ## What You’ll Be Required to Do - Use **recognised digital software** to: - Create and keep **digital business records** of income & expenses - Send **quarterly summaries** of trading/property income and expenses to HMRC - Submit a final Self Assessment return by 31 January following the end of the tax year using that software ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/introduction?utm_source=openai)) - Ensure your software is connected to HMRC via your agent or personally; undergo any required identity checks and authorisations. ([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai)) --- ## Action Steps: How to Get Ready 1. **Calculate your qualifying income** for the most recent tax year to see whether you exceed the threshold. 2. **Choose compliant software** that handles digital record-keeping, quarterly updates, and final return submissions. 3. Start maintaining digital records now—even if not yet required—to reduce transition risks. 4. Sign up for HMRC’s trial/testing scheme to familiarise yourself with the new processes. ([gov.uk](https://www.gov.uk/government/news/one-year-until-making-tax-digital-for-income-tax-launches?utm_source=openai)) 5. Speak to your accountant or tax adviser for specific impacts on cashflow, tax payments, and record-keeping habits. --- ## Examples - **Alice**, a landlord earning £55,000 in gross rental income and also £10,000 self-employed income: from April 2026 must start using MTD. She needs digital software, quarterly updates and a final return digitally. - **Ben**, a sole trader earning £35,000: requirement comes April 2027, so he has time; but early adoption will help with cash flow forecasts and familiarisation. - **Cara**, whose property income is £5,000 and self-employment income £15,000: she will only be in scope in tax years starting April 2028 if thresholds lowered to £20,000. For now, optional adoption. --- ## Risks & Benefits **Benefits:** - More accurate reporting and fewer surprises at year-end - More timely tax liabilities spread over the year via quarterly updates - Easier compliance, if systems are in place early **Risks:** - Cash flow challenges if tax payments are earlier than expected - Cost of software and potential training/time investment - Need for strong record-keeping discipline --- ## Bottom Line Make sure you check your qualifying income soon, choose compliant software, and begin digital record-keeping before your deadline. Whether you're in the 2026, 2027, or 2028 phase, getting ahead now can save time, reduce errors, and avoid last-minute stress.