What’s changing
From 6 April 2026, HMRC will require sole traders and residential property landlords whose gross income from trade or rental exceeds £50,000 to:
- Keep digital accounting records using software that meets HMRC’s Making Tax Digital (MTD) standards.
- Submit quarterly updates of income and expenses to HMRC.
- File their end-of-year return using compatible software (even small landlords who previously used paper).
For those with income between £30,000–£50,000, the same obligations will begin 6 April 2027, and for incomes above £20,000, from 6 April 2028. (taxscape.deloitte.com)
Why this matters now
- If you qualify, you need to choose and implement software capable of meeting MTD requirements.
- Quarterly reporting adds administrative work—and missing deadlines could trigger penalties. Late submission fines and time penalties may increase. (gov.uk)
- Even for those not yet in scope, planning early helps prevent disruption when thresholds catch up.
Key steps to compliance (actionable advice)
- Review your 2024/25 gross income: includes both trade and property. If it’s over £50,000, you’re first in line.
- Choose MTD-compatible software: must digitise records, support quarterly submissions, and generate end-of-year compatible returns. Test with free or trial versions if available.
- Train or engage help: accountants and agents can smooth transition; HMRC agent toolkits are being updated. (taxscape.deloitte.com)
- Plan cashflow: quarterly payments change timing; budget for tax payments throughout the year.
- Stay updated on exemptions or deferrals: very small businesses and certain groups can expect exemptions or delayed start dates. (gov.uk)
Real-world example
Sarah is a landlord with £60,000 gross rental income from two properties plus a small online boutique. From April 2026:
| Before April 2026 | After April 2026 |
|---|---|
| Submits self-assessment annually, manually tracking expenses. | Records rent, repairs, and other expenses digitally; sends quarterly summaries, and files year-end tax return via software. |
| Can use spreadsheets or paper receipts. | Must use MTD-compatible software; adjustments needed for receipts, property income. |
Failing to register or file through compatible software risks penalties and delays.
Bottom line
If you're a sole trader or landlord earning above £50,000 combined from trade and property, make April 6, 2026 your key date. Get software, organise records, plan for quarterly submissions, and avoid last-minute scrambling.