Making Tax Digital, often shortened to MTD, is moving into its next phase. From April 2026, new reporting requirements will apply to certain sole traders and landlords across the UK.
If your total income from self-employment and property exceeds £50,000, you may be required to submit quarterly updates to HMRC under the Making Tax Digital regime.
Understanding how Making Tax Digital for sole traders and landlords in the UK works now will help you avoid disruption later.
Who Is Affected by Making Tax Digital from April 2026?
From the 6th of April 2026, Making Tax Digital for Income Tax Self Assessment will apply to:
- Sole traders with qualifying income over £50,000
- Landlords with rental income over £50,000
- Individuals with combined self-employment and property income exceeding £50,000
It is important to note that this threshold applies to total qualifying income, not profit. If your turnover or gross rental income exceeds £50,000, you may fall within scope.
Further phases are expected to bring the threshold down in future years.
You can read more about compliance changes here:
What Will Change Under MTD?
Under Making Tax Digital, affected individuals must:
- Keep digital records of income and expenses
- Use compatible software
- Submit quarterly updates to HMRC
- Complete an end-of-period statement
- Submit a final declaration to confirm total income
This replaces the current single annual self-assessment submission for those within scope.
Quarterly reporting does not necessarily mean paying tax quarterly. However, it does mean more frequent submissions and stricter digital record keeping.
If you currently manage your records manually or rely on spreadsheets, you may need to review your systems.
Our Bookkeeping Support services help ensure digital compliance is structured and manageable.
Does Rental Income Count?
Yes. Rental income from UK property is included when assessing whether you exceed the £50,000 threshold.
For example, if you earn £30,000 from self-employment and £25,000 from rental income, your combined qualifying income would be £55,000. In this case, Making Tax Digital would apply from April 2026.
Many landlords are unaware that they may be brought into scope due to combined income levels.
What About Limited Company Directors?
Making Tax Digital for Income Tax currently applies to sole traders and landlords, not limited companies. Companies are subject to separate corporation tax reporting rules.
However, if you operate both a limited company and have rental or self-employed income personally, MTD may still apply to you in respect of that personal income.
Common Mistake: Waiting Until the Deadline
One of the most common issues we see across Kent is business owners assuming they can deal with compliance changes at the last minute.
Making Tax Digital requires:
- Software setup
- Process changes
- Staff training where relevant
- Clear digital record keeping
Leaving preparation until early 2026 risks unnecessary stress and potential non-compliance.
Early preparation provides time to select appropriate software, streamline processes and avoid disruption to cash flow or operations.
Preparing Now for April 2026
If you believe your income may exceed the £50,000 threshold, it is sensible to:
- Review your latest accounts
- Confirm your qualifying income
- Assess your current record-keeping system
- Consider migrating to MTD-compatible software
Structured preparation ensures quarterly reporting becomes routine rather than reactive.
If you are unsure whether Making Tax Digital applies to you, or you want clarity over how to prepare, you can speak to the team here:
Making Tax Digital is not simply an administrative update. It represents a shift towards more regular, digital reporting.
Preparing early means staying in control, rather than scrambling to catch up once April 2026 arrives.
