MTD CHANGES FROM APRIL 2026

Act now: 864,000 sole traders and landlords face new tax rules – the clock is ticking so get in touch to see how we can help you.

As part of the ongoing rollout of Making Tax Digital (MTD) for Income Tax, there are significant changes coming into effect from 6 April 2026. These will directly impact your clients who are sole traders or landlords.

Mandatory MTD for ITSA

• Who: Sole traders and landlords with gross income over £50,000 (from 2024–25 tax year).

• What: Digital record-keeping and submission via MTD‑compatible software becomes mandatory.

Digital Record-Keeping

• All business and property income and allowable expenses must be recorded digitally.

• Simple spreadsheets or manual logs will not meet compliance.

Quarterly Updates  and a  Final Declaration

• Annual Self Assessment will be replaced with four quarterly updates, plus a final declaration.

• Deadlines: roughly 1 month after the quarter ends (e.g., Q1 due August 2026).

• The traditional SA is still required for the 2025–26 tax year.

Thresholds Over Time

• April 2026: £50,000 qualifying income

• April 2027: £30,000

• April 2028: £20,000

Penalty Soft Landing

• HMRC will not apply penalties for late quarterly submissions in the first year (tax year 2026–27).

• Penalties do apply for the final declaration and tax payments.

What This Means for You

• Meeting the threshold must transition to MTD-compliant software.

• Digital record-keeping and quarterly reporting schedules.

• Early planning ensures smooth adoption and avoids last-minute issues.

Start giving considering now if you need to implement for the new structure, we can help with reviewing records now and ensure they are MTD-ready and also recommending software to prevent surprises in April 2026.

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