What It Means for Sole Traders and Landlords

If you’re a sole trader or landlord earning £50,000 or more in gross income, this Making Tax Digital roadmap for April 2026 will help you understand what’s coming and how to prepare. Making Tax Digital (MTD) will apply from 6 April 2026, which might sound a little daunting at first. With the right preparation, though, it doesn’t have to be stressful. Below is a simple roadmap to help you get ready. If you’d like to talk it through, we’re always happy to have a chat and guide you on.

Our recommended roadmap:

We recommend getting set up ahead of time so you’re not rushing when MTD goes live:

In February 2026:

1. Set up Xero – Simple version –

which is for sole traders and landlords – costs £7 plus VAT per month Click here for more information – Explore Xero

2. Consider a separate bank account:

If you do not already have a separate bank account, then we would recommend you consider this

3. Connect your bank fee to Xero:

Linking your bank account to Xero allows transactions to flow in automatically, saving you time and reducing the risk of missing anything.

From April 2026:

4.  Monthly bookkeeping

Every month, you will need to reconcile the transactions in Xero

5. Quarterly updates to HMRC

Every quarter, you will produce the quarterly statement and then file it with HMRC using Xero software

6. Our support

You may wish to consider outsourcing points 1 and 2 to us and would be delighted to take this stress away from you

MTD explained:

Landlords and Self-Employed – consider using software to maintain your books and records from 6 April 2025

I hope this email finds you well, and I would like to update you on the Government’s Making Tax Digital (MTD) initiative and how it may affect you. With significant changes on the horizon, it’s important to ensure you’re well prepared and fully compliant.

What is MTD?

MTD is a government initiative aimed at simplifying the tax system by requiring digital record-keeping and quarterly reporting through HMRC-approved software. MTD for Income Tax Self Assessment (MTD for ITSA), will be rolled out from April 2026 for individuals and landlords with annual income above £50,000, extending to those with income over £30,000 from April 2027.

Quarterly Reporting Requirements

Under MTD for ITSA:

• You will need to submit quarterly updates summarising your income and expenses for each three-month period.
• At the end of the tax year, a final declaration will confirm your tax liability and allow any necessary adjustments (e.g., for allowances or reliefs).

It’s important to note that quarterly reporting does not mean quarterly tax payments. Tax will still be due on the usual Self Assessment deadlines, though you can choose to make voluntary payments during the year if desired.

Turnover Thresholds

To determine if MTD applies to you, HMRC uses your annual turnover from the previous tax year. This includes:

• All income from self-employment (gross revenue, before expenses).
• Rental income from property (gross, before expenses).

For example, if you generate £35,000 from self-employment and £20,000 from rental income, your total turnover of £55,000 exceeds the £50,000 threshold, meaning you would need to comply with MTD for ITSA starting April 2026.

Need a Hand?

MTD is a big change, but you don’t have to navigate it alone. If you’d like support with setting up software, managing your records, or handling submissions to HMRC, we’d be delighted to help.

Feel free to get in touch for a friendly, no-obligation chat about how to get ready for MTD.

Further Reading:

Making Tax Digital