Is your business ready for Making Tax Digital (MTD) for Income Tax?
If you are a sole trader, Making Tax Digital for Income Tax is something to start thinking about now, rather than waiting until the first deadline is just around the corner.
For a long time, many small businesses have handled tax once a year. They gather their records, check the figures, and complete the tax return close to the deadline. MTD changes that approach. If it applies to you, your bookkeeping will need to stay up to date throughout the year instead of being left until the last minute.
MTD for Income Tax applies to sole traders and landlords in Self Assessment whose qualifying income is above the relevant threshold. This means your gross income from self-employment and property before expenses are taken off, not your profit. That’s an important distinction, because some people assume the rules only apply when profits are high, and that is not the case.
The changes are being brought in gradually:
from 6 April 2026 for those with qualifying income over £50,000
from 6 April 2027 for those with qualifying income over £30,000
from 6 April 2028 for those with qualifying income over £20,000
If the rules apply to you, you will need to keep digital records and use compatible software to send quarterly updates to HMRC. The main quarterly deadlines are:
7 August, 7 November, 7 February and 7 May.
This does not mean filing four extra tax returns, but it does mean your records will need to be accurate and up to date during the year.
For instance, a sole trader who normally hands everything over once a year in January may find MTD challenging at first, because their records will need to be kept in much better order throughout the year. Someone who already keeps on top of their bookkeeping regularly is likely to find the transition far easier.
After the fourth quarterly update, there is still a year-end process to complete. Final adjustments must still be made, any other taxable income needs to be included, and the annual tax return must be submitted through compatible software by the usual 31 January deadline.
For most sole traders, the biggest difficulty will not be the deadlines themselves. It will be adapting to a new way of working. Businesses that stay organised throughout the year should manage well. Those that rely on catching up at year end are more likely to struggle.
How Tickdoc can help
Making Tax Digital becomes much more manageable when the right systems are in place before the deadlines arrive.
Tickdoc helps sole traders prepare with bookkeeping support, software setup, training, and ongoing reporting support, so records stay accurate and up to date all year round. Instead of rushing to catch up at year end, you can stay organised, remain compliant, and feel more in control.
Need help getting ready for MTD for Income Tax? Get in touch with Tickdoc and let’s put the right system in place before the deadline begin.
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