Sole traders and landlords earning over £50,000 must prepare for Making Tax Digital from April 6, with new quarterly update requirements using digital software
HMRC is offering various forms of complimentary support to assist with preparation(Image: Vladimir Vladimirov via Getty Images)
Sole traders and landlords with earnings exceeding £50,000 from self-employment and property are being encouraged to take action immediately, with only weeks remaining to prepare for Making Tax Digital (MTD) for Income Tax.
From April 6 2026, eligible people will be required to utilise approved software to maintain digital records and submit quarterly light-touch updates of their income and expenditure to HM Revenue and Customs (HMRC). It’s crucial to note these are not additional tax returns.
HMRC is offering various forms of complimentary support to assist with preparation, including online guidance, webinars and videos. Those genuinely unable to use digital tools may apply for an exemption, with further details and guidance accessible on GOV.UK.
Free software options are available, and once income and expenditure are logged, the software produces a straightforward summary to submit to HMRC. At the conclusion of a tax year, those covered by MTD for Income Tax will still be required to submit a tax return by the following January 31 – however, the software will already contain the information from the quarterly updates, eliminating any last-minute scramble for records or receipts, reports the Daily Record.
Craig Ogilvie, HMRC’s Director of Making Tax Digital, said: “A range of software is available and the system is straightforward and helps reduce errors. Thousands of volunteers have already used it successfully. This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.
“Spreading your tax admin throughout the year means avoiding that last minute scramble to complete a tax return every January. Go to GOV.UK and start preparing today.”
Thousands of self-employed people and landlords have already registered for MTD for Income Tax, with over 12,000 quarterly updates successfully filed through a voluntary pilot scheme.
Those enrolling in MTD in April 2026 will still submit their tax return for the 2025 to 2026 tax year in the standard manner by January 31 2027, as this encompasses the period prior to MTD commencing. The initial MTD tax return, spanning the 2026 to 2027 tax year, will be required by January 31 2028.
To assist with the changeover, the government confirmed that customers joining MTD for Income Tax in April 2026 will not incur penalty points for late quarterly updates during the first 12 months. Under the revised system, penalty points will be issued for each delayed submission, with a £200 fine only imposed once four points accumulate. This ensures occasional oversights won’t trigger instant penalties.
HMRC is encouraging those affected by MTD for Income Tax to take action now: review the guidance, select software and register on GOV.UK. Those who employ a tax agent should discuss preparations with them.
