Compliance
MTD for Income Tax: What Sole Traders & Landlords Need to Know from April 2026
From April 6, 2026, many sole traders and landlords earning over £50,000 must start using Making Tax Digital with quarterly updates—here's how to prepare.
By NomadicTax Research Team • 5-8 min read • May 5, 2026
## What is Making Tax Digital (MTD) for Income Tax?
MTD for Income Tax Self Assessment (ITSA) is a UK government initiative requiring those in scope to use **compatible software** to keep digital records, submit **quarterly updates** of income and expenses, and make a final declaration at year-end. ([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
## Who is affected?
- Sole traders and landlords with combined income from self-employment and property exceeding **£50,000 per year**. ([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
- If your self-employed and/or property income is below that but expected to increase, planning ahead is still wise. Software acquisition and familiarity take time.
## Key timelines & deadlines
| Requirement | Deadline | First Reporting Period | First Final Declaration Due |
|---|---|---|---|
| Quarterly updates | From **6 April 2026** | Quadrant 1: **6 April–5 July 2026** | Final declaration due **31 January 2028** | ([techradar.com](https://www.techradar.com/pro/software-services/free-making-tax-digital-mtd-software?utm_source=openai))
## What you need to do now
- **Choose HMRC-recognised software** that supports sending quarterly returns. Check the gov.uk software finder list. ([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
- **Set up digital bookkeeping** to capture incomes, expenses with proper categorisation.
- **Plan cash flow** so you can manage quarterly liabilities (Income Tax, NICs, etc.) rather than one large sum at year-end.
- **Train accounting staff or yourself**––this is a structural change in reporting rhythm.
## Practical example
Sarah runs holiday lets and freelance writing, with combined revenue of £60,000/year. Under old rules, she could file once after year-end and pay tax then. From April 2026:
- She must submit quarterly updates (e.g. **by 7 August 2026** covering income/expenses to 5 July 2026)
- Use digital software to send updates. Light-touch: only revenue, expenses, net profit.
- Her final declaration (covering the full 2026-27 tax year) is due **31 January 2028**.
## What are benefits & challenges?
**Benefits**
- Smoother cashflow and better tax forecasting
- Less risk of big surprises at year-end
- Digital record-keeping often saves time and avoids errors
**Challenges**
- Initial setup costs and learning curve
- Need for reliable digital tools and possibly accounting support
- Risk of missing deadlines, triggering penalties (first late actions expected from April 2027)
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**Takeaway**: If you're a sole trader or landlord near or above the threshold, begin transitioning now. The quarterly rhythm may feel odd at first, but digital readiness will be essential in the long term.