The UK tax system is undergoing its biggest digital transformation in decades, and if you’re a sole trader or landlord, it’s time to ask yourself—are you ready for Making Tax Digital (MTD)?

MTD is not just another HMRC initiative. It’s a fundamental shift in how millions of people manage and report their taxes. With recent updates to the rollout, many more individuals will be brought into the fold, and preparation is key to avoiding disruption and unnecessary stress.

What Is Making Tax Digital?

Making Tax Digital is a government initiative designed to modernise the UK tax system. It requires taxpayers to keep digital records and submit their tax information to HMRC using approved software. The goal is to reduce errors, improve efficiency, and give taxpayers more up-to-date information about their tax affairs.

What’s Changing – And When?

The latest phase, MTD for Income Tax Self Assessment (MTD for ITSA), is being phased in from April 2026. Here’s what it means for sole traders and landlords:

• If you earn more than £50,000 per year from self-employment or property income (or a combination of both), you’ll need to follow the MTD rules from 6 April 2026.
• Those earning between £30,000 and £50,000 will join a year later, from 6 April 2027.
• If your income is below £30,000, MTD will not apply—yet. However, HMRC has indicated they may expand the threshold in the future.

Under MTD, you’ll be required to:

• Keep digital records of your business or property income and expenses.
• Submit quarterly updates to HMRC through compatible software.
• Send a final end-of-period statement and a final declaration at the end of the tax year—effectively replacing the traditional Self Assessment tax return.

What Do You Need To Do Now?

If you’re affected by the new rules, it’s important not to wait until the last minute. Here’s a simple checklist to get started:

✅ Check your income threshold – Are you over the £30k or £50k marks?

✅ Choose MTD-compatible software – You’ll need an HMRC-recognised solution that suits your business.

✅ Start keeping digital records – Even if it’s not mandatory for you yet, getting into the habit early can make the transition smoother.

✅ Speak to your accountant – They can help you understand how MTD affects you personally and ensure you’re compliant from day one.

---

We’re Here To Help

At The Practice Ledbury, we’ve been supporting sole traders and landlords across the UK to navigate the changing tax landscape with confidence. Whether you’re looking for the right software, help with digital record-keeping, or just want to understand your obligations under MTD, we’re here to guide you every step of the way.

Get in touch today to explore your options and enjoy peace of mind knowing your tax affairs are in expert hands.