Compliance
Preparing for the MTD Income Tax Wave: What Sole Traders and Landlords Need to Do by April 2026
From 6 April 2026, sole traders and property landlords with gross income above £50,000 must comply with Making Tax Digital for Income Tax—quarterly reporting and compatible software now mandatory.
By NomadicTax Research Team • 5-8 min read • March 27, 2026
## 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](https://taxscape.deloitte.com/updates/monthly-tax-update/monthly-tax-update---march-2026.aspx?utm_source=openai))
## 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](https://www.gov.uk/government/publications/supporting-documents-for-spring-statement-2025/spring-statement-2025-policy-costings?utm_source=openai))
- 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](https://taxscape.deloitte.com/updates/monthly-tax-update/monthly-tax-update---march-2026.aspx?utm_source=openai))
- **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](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
## 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.