MTD is coming in April 2026. Here’s exactly what it means and how to get ready without stress.
Making Tax Digital (MTD) is no longer something “coming in the future” — it’s happening. From April 2026, many UK sole traders will need to follow new rules set by HMRC. If you’ve been putting it off or feeling unsure, you’re not alone. The good news is it’s far more manageable than it sounds once you understand it.
What Is Changing in April 2026?
From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must:
– Keep digital records
– Use MTD-compatible software
– Submit quarterly updates to HMRC
These updates are not extra tax returns. They are simply summaries of your income and expenses throughout the year.
Who Will Be Affected?
You’ll need to follow MTD rules if:
– You are self-employed or a landlord
– Your total qualifying income is over £50,000
The rules will expand:
– Over £30,000 from April 2027
– Over £20,000 from April 2028
So even if you’re not affected in 2026, it’s coming.
What Should You Do Now?
Start simple. You don’t need to overhaul everything overnight.
Focus on:
– Checking your income level
– Moving away from spreadsheets if needed
– Looking at digital bookkeeping tools
– Getting advice early
The sooner you start, the easier it becomes.
Will There Be Penalties?
HMRC has confirmed that for the first year (2026–2027), they will not apply penalty points for late quarterly updates.
However:
– You still need to comply
– Other penalties can still apply
– Getting organised early avoids stress later
Why This Doesn’t Need to Be Stressful
Most worries around MTD come from uncertainty.
In reality:
– You’re already tracking income
– You’re already doing tax returns
– This is just a more regular, digital version
With the right setup, it can actually make things easier.
FAQ:
Q: Are quarterly updates extra tax returns?
A: No. HMRC has clearly stated they are not additional tax returns.
Q: Do I need an accountant?
A: Not required, but support can save time and prevent mistakes.
