Making Tax Digital: What Sole Traders & Landlords Must Do Next

What is “Making Tax Digital for Income Tax” (MTD-IT)?

Beginning April 2026, sole traders and landlords in the UK with income over £50,000 must keep digital records and submit quarterly updates to HM Revenue & Customs (HMRC). (gov.uk) As of August 2026, over 436,000 have made their first advance quarterly update; signing up begins in September 2026 for those who haven’t yet joined. (gov.uk)

Who this affects globally

• UK-resident individuals/expatsarian landlords with UK income sources.
• Non-UK residents receiving UK rental income.
• Digital nomads with UK business income or landlords.

What you need to do to comply

• Use recognised software that meets HMRC’s digital requirements—spreadsheets aren’t sufficient unless processed by certified software.
• Quarterly updates must cover income, expenses, and computation of profit/loss.
• Digital recordkeeping: supporting documents like invoices, receipts, should be stored digitally.
• Sign up before deadlines—in September 2026 HMRC begins enrolling those overdue. (gov.uk)

Risks of non-compliance

• Eventually penalties for late or non-filed quarterly updates will apply.
• Delays in claiming reliefs or deductions tied to UK income.
• For those operating cross-border, failure to comply may trigger audit exposure in both UK and foreign home jurisdictions.

Cross-border tax planning tips under MTD-IT

• If you split your time internationally, assess whether your UK home or UK business income triggers the £50,000 threshold.
• Use multi-currency software that can convert and track income and expenses from abroad.
• Ensure invoices from remote clients or platforms contain sufficient detail for HMRC’s requirements.
• Keep digital backups—cloud storage with encryption is recommended.

Practical Timeline

Bottom line: If you derive UK business or rental income, maintaining digital records & submitting quarterly updates isn’t optional—plan now to stay compliant and avoid penalty exposure.