Sole Traders and Landlords: MTD

The countdown has begun - from April 2026, Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) becomes mandatory for sole traders and landlords earning over £50,000 annually. Those earning above £30,000 will follow in April 2027.

This shift is part of HMRC’s broader digital transformation, designed to simplify tax, reduce errors, and ensure timely and accurate reporting. And while it may feel like there's still time, early action can make all the difference in avoiding disruption - and penalties.

What Is MTD for ITSA?

Making Tax Digital for Income Tax Self-Assessment - it’s part of the UK Government’s wider Making Tax Digital initiative, which aims to modernise the tax system by moving it online. Under MTD for ITSA, affected individuals will be required to:

• Digitally record income and expenses using HMRC-approved software.

• Submit quarterly updates to HMRC detailing earnings.

• File an end-of-period statement and a final declaration annually.

This marks the end of the traditional annual tax return for those affected. Instead, tax will be reported more frequently and digitally.

Why This Matters - And Why You Should Act Now

Here’s why acting now matters:

✅ Test Digital Solutions Early – Switching to digital record-keeping now helps you iron out any issues well ahead of time.

✅ Ensure Accuracy – Digital tools help reduce errors and keep you compliant.

✅ Save Time & Hassle – Quarterly updates might seem daunting, but with the right system, it becomes routine.

Switching to quarterly updates will distribute the workload more evenly across the year, align the tax system more closely with real-time reporting, and help businesses manage their finances proactively while avoiding last-minute stress.

James Murray MP, Exchequer Secretary to the Treasury, said:

"MTD for Income Tax is an essential part of our plan to transform the UK's tax system into one that supports economic growth.

“By modernising how people manage their tax, we're helping businesses work more efficiently and productively while ensuring everyone pays their fair share.

“This is a crucial step in this government's decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.”

Craig Ogilvie, HMRC’s Director of Making Tax Digital, said:

"MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax.

"By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.”

Source: HMRC

How Styles & Associates Can Help

If your annual income from self-employment or property is above £50,000, you’ll be required to comply from April 2026. But you don’t need to wait to begin preparing.

Start by reaching out to discuss your current setup, and we can explore the best options for you. We can even help you get set up with digital record-keeping now, so you’re confident and compliant well before the official rollout.

Whether you’re a sole trader juggling multiple clients or a landlord managing a property portfolio, we’ll make sure you’re not just ready-but confident.