You may have heard us talking about Making Tax Digital – we’ve been mentioning it to clients and sharing updates on social media for a while now. But if it’s still a bit of a mystery to you, don’t worry – you’re not alone.
MTD is a major change to how certain individuals report income to HMRC. Over the next few years, it will start to affect more and more sole traders and landlords.
This blog breaks down what it is, when it starts, who it applies to, and how you can prepare – calmly and confidently.
Timeline and income thresholds
As of the Spring Statement (26 March 2025) and HMRC guidance updated 22 May 2025:
- 6 April 2026: MTD ITSA becomes mandatory for sole traders and landlords with combined gross income over £50,000.
- 6 April 2027: Threshold lowers to £30,000.
- 6 April 2028: Threshold lowers again to £20,000.
- Under £20,000: No fixed date – HMRC has said this group will be considered later.
Who will be affected?
You’ll need to follow MTD ITSA rules if you are:
- A sole trader or landlord registered for Self-assessment.
- Your combined gross income from self‑employment and/or property exceeds the threshold for the relevant year.
HMRC will notify you if your income puts you over the threshold. You’ll then need to sign up – it’s not automatic.
Note: Partnerships and limited companies are not yet included, but HMRC plans to bring them in at a later stage.
What you'll need to do
From your MTD start date, you must:
- Keep digital records using MTD-compatible software.
- Submit quarterly updates to HMRC.
- Send an End of Period Statement (EOPS) and a Final Declaration after the tax year ends.
How to get ready
- Check your income to understand when you’ll need to comply.
- Use compatible software – many cloud platforms already meet HMRC standards.
- Consider signing up early – voluntary registration is open and can make your transition smoother.
- Speak to your accountant for tailored advice and support.
Want to get MTD-ready?
Whether you’re over the threshold already or just want to prepare ahead of time, we can help you understand what’s changing and how to stay compliant.
Email us at hello@completecloud.rocks – we’ll guide you at your pace, with no pressure to switch before you’re ready.
Stay in the loop
We’ll continue sharing updates on Making Tax Digital and other key changes that affect sole traders and landlords. Follow us on social media to stay up to date with deadlines, software tips, and HMRC guidance – delivered in plain English.