Getting Ready for Making Tax Digital: What Sole Traders and Landlords Need to Know
With the new tax year approaching in April, sole traders and landlords with income over £50,000 need to prepare for Making Tax Digital (MTD). From 6 April 2026, around 900,000 individuals will be required to submit quarterly updates to HMRC using approved software.
If you're affected by this change, it's worth getting prepared now rather than leaving it until the last minute. MTD represents a significant shift in how you'll manage your tax affairs, and early preparation will make the transition far smoother.
Using approved software
MTD requires you to use HMRC-approved software to keep your records and submit your quarterly updates. Whether you're already managing your bookkeeping digitally or you've been working with spreadsheets or paper records, you'll need to make sure the software you choose is approved for MTD.
Beyond compliance, good accounting software can bring real benefits to your business. It can help you streamline your bookkeeping, make cash flow forecasting easier, support better financial decision-making, and reduce the risk of errors. When you're choosing software, it's worth thinking about these wider advantages rather than just ticking the MTD box.
Registering for MTD
HMRC will contact you based on your tax return information to let you know you need to sign up for Making Tax Digital. However, they won't register you automatically—this is something you'll need to do yourself, and it's important to do it in time.
Are there any exemptions?
Some people are automatically exempt from MTD. For example, if you're submitting a tax return as a trustee or as a personal representative of someone who has died, you won't need to sign up. HMRC will generally notify you if you're automatically exempt.
There are also situations where you can apply for an exemption, so it's worth checking whether your circumstances might qualify.
What if your income is less than £50,000?
MTD is being introduced in phases. The timeline for sole traders and landlords is as follows:
6 April 2026: income above £50,000
6 April 2027: income above £30,000
6 April 2028: income above £20,000
If you'd like to sign up earlier on a voluntary basis, you can do so.
What about partnerships?
MTD doesn't apply to business partnerships yet, though HMRC has confirmed that partnerships will need to use MTD in the future. The timeline for this will be announced later.
How we can help
Choosing the right software can feel overwhelming, especially if you're not familiar with the options available. We can provide tailored recommendations based on your business and offer any training you need to get comfortable using it. We can also handle your registration with HMRC to make sure everything is set up correctly.
If you'd like ongoing support with bookkeeping, completing your quarterly returns, or managing your end-of-year submissions, we're here to help. Our goal is to make MTD as straightforward as possible so you can focus on running your business.
If you're a sole trader or landlord affected by MTD and you'd like to discuss how to prepare, get in touch with our team. We're based in Cardiff and work with businesses and individuals across South Wales.