Making Tax Digital for income tax is in force for sole traders and landlords whose qualifying income is over £50,000. From 6 April 2026 those businesses keep digital records and send HMRC a quarterly update, then a final declaration after the tax year. The tax you pay does not change. The way the records are kept does.
Who Making Tax Digital for income tax applies to
HMRC looks at qualifying income: gross income from self-employment and property, before expenses. If that figure is over £50,000, Making Tax Digital for income tax applies from April 2026. From April 2027 the line drops to £30,000. People under the line can still file a normal self assessment return.
A limited company is not in this regime. Company accounts and corporation tax follow different dates. A director who also has rental income, or a sole trade beside the company, can be in Making Tax Digital for that personal income and still file the company accounts separately.
What you actually have to send
You need software that stores the records digitally and can file updates to HMRC. A spreadsheet on its own is not enough unless it is linked to compatible software. Each quarter you send a summary of income and expenses. After 5 April you still complete a year-end declaration, which is where allowances, other income and the final tax bill are worked out.
If you are close to the line
Check the gross figures, not the profit. A landlord with several properties, or a sole trader with a strong year of sales, can cross £50,000 without feeling like a large business. If you are over the line and the records are still a folder of bank statements, the first job is to get them into software before the next quarterly update is due.
We set this up for sole traders and landlords as part of self assessment and bookkeeping. If you are not sure which side of the line you are on, book a free accounting review and we will check the figures with you.
If you would like this filed for you, see our Self Assessment service or book a free accounting review. The Individual package starts from £200 a return.
