Compliance
Your Roadmap to Making Tax Digital: What Sole Traders & Landlords Need to Know for April 2026
Starting 6 April 2026, many sole traders and landlords will need to change how they record income and report to HMRC under Making Tax Digital. Here's a practical breakdown to help you stay compliant.
By NomadicTax Research Team • 5-7 min read • April 4, 2026
## What is Making Tax Digital (MTD) for Income Tax?
Making Tax Digital for Income Tax is HMRC’s new framework for self-assessment. It requires eligible sole traders and landlords to keep **digital records** and submit **quarterly updates** of income and expenses using MTD-compatible software.([makingtaxdigital.campaign.gov.uk](https://makingtaxdigital.campaign.gov.uk/get-ready-for-making-tax-digital/?utm_source=openai))
## Who is in Scope (2026-2028 Phase-In)
| Start Date | Minimum Qualifying Income (Self-employment + Property Gross Income) |
|----------------|--------------------------------------------------------------------|
| From 6 April 2026 | Over **£50,000** from the 2024-25 tax year |
| From 6 April 2027 | Over **£30,000** from the 2025-26 tax year |
| From 6 April 2028 | Over **£20,000** from the 2026-27 tax year |([gov.uk](https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-sole-traders-and-landlords/making-tax-digital-for-income-tax-self-assessment-for-sole-traders-and-landlords?utm_source=openai))
## Key Requirements & Timeline
- **Digital record-keeping**: Maintain accurate digital records of income and allowable expenses.([gov.uk](https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-sole-traders-and-landlords/making-tax-digital-for-income-tax-self-assessment-for-sole-traders-and-landlords?utm_source=openai))
- **Quarterly updates**: Report totals each quarter with the first deadlines in place shortly after the start date.([makingtaxdigital.campaign.gov.uk](https://makingtaxdigital.campaign.gov.uk/get-ready-for-making-tax-digital/?utm_source=openai))
- **Self Assessment returns**: Continue to file annual returns, but via MTD-compatible software once in scope.([gov.uk](https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-sole-traders-and-landlords/making-tax-digital-for-income-tax-self-assessment-for-sole-traders-and-landlords?utm_source=openai))
## Exemptions & Reliefs
You might be exempt from MTD if you:
- are digitally excluded (for example, no internet or devices),
- or fall under certain categories like having only property income under threshold, drawing partner profits, etc.
Read HMRC’s guidance carefully to see if you qualify.([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai))
## Practical Steps for Compliance
**1. Start early**: The requirement hits April 2026. Don’t wait until the first quarterly update deadline.
**2. Choose compatible software**: Ensure it is recognised by HMRC and supports creating digital records, submitting quarterly summaries, and can integrate Self Assessment return submissions.([makingtaxdigital.campaign.gov.uk](https://makingtaxdigital.campaign.gov.uk/get-ready-for-making-tax-digital/?utm_source=openai))
**3. Categorise income correctly**: Only self-employment and property income count towards the thresholds. Partnership profits are considered separately.([gov.uk](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/updates?utm_source=openai))
**4. Maintain good expense records**: Use software that allows detailed categorisation of expenses—this ensures allowable expenses aren’t lost.
**5. Seek help**: Agents, webinars, and HMRC forums are essential if you're unrepresented. Over 200,000 unrepresented taxpayers are expected to be in scope in 2026.([litrg.org.uk](https://www.litrg.org.uk/press-release/litrg-launches-free-making-tax-digital-information-hub-support-taxpayers-through-biggest-tax-change?utm_source=openai))
## Actionable Example
Jo is a landlord who earned £55,000 in gross rental income in tax year 2024-25. As of 6 April 2026, Jo must start using MTD:
- Sign up for HMRC's MTD for ITSA,
- Choose software,
- Keep digital records of all rents and expenses,
- Submit a quarterly update after 6 April 2026,
- Continue to file her annual Self Assessment return—but through software once in scope.
Failing to comply could incur penalty points after the first year of usage.([makingtaxdigital.campaign.gov.uk](https://makingtaxdigital.campaign.gov.uk/get-ready-for-making-tax-digital/?utm_source=openai))
## Big Picture Benefits & Risks
**Benefits**:
- smoother tax admin,
- fewer errors and missed claims,
- more regular insight into financials throughout the year.
**Risks if you delay**:
- potential penalties,
- complications if records aren’t properly digitised,
- scrambling to prepare first quarterly reports.
## Summary
Make 2026 your year of preparation. If you expect to breach that £50,000 qualifying income threshold, start moving to digital systems now. Whether that means getting the right software, organising expense records, or making contact with an accountant—being ahead of the curve is your best bet.