“Do I need to sign up for Making Tax Digital?” It’s one of the most common questions sole traders are asking right now. The answer depends on your income, your setup, and when the rules apply to you.
MTD Thresholds Explained
MTD is being introduced in stages:
– April 2026: over £50,000
– April 2027: over £30,000
– April 2028: over £20,000
If your income crosses these thresholds, you’ll need to follow MTD rules.
What Is Qualifying Income?
Qualifying income means your total income before expenses from:
– Self-employment
– Property (if applicable)
It’s not profit — it’s total income.
Do You Need to Sign Up Now?
If you’re below £50,000, you don’t need to sign up yet.
But you should:
– Start preparing early
– Get familiar with digital tools
– Avoid leaving it until the last minute
What About Software?
MTD requires compatible software.
This means:
– No manual submissions
– No basic spreadsheets alone
– Software must connect to HMRC
Do You Need to Register?
In most cases:
– HMRC will notify you
– Or your accountant will handle registration
But preparation is still your responsibility.
Common Confusion Points
Many people worry about:
– Quarterly updates (not extra returns)
– Complexity (simpler than expected)
– Cost (often minimal)
The key is starting early.
FAQ:
Q: Can I stay on spreadsheets?
A: Not on their own. They must connect to MTD software.
Q: What if my income fluctuates?
A: You may enter or leave MTD depending on thresholds.
Still unsure if MTD applies to you? We can quickly check and guide you through exactly what you need to do.
