How MTD Affects Self-Employed Sole Traders

If you’re a sole trader earning over £50,000, you’ll need to follow Making Tax Digital for Income Tax (MTD for ITSA) from April 2026. This post explains how MTD Affects Self-Employed Sole Traders – what’s changing, what you’ll need to do, and how to get ready.

What Is MTD for ITSA?

MTD for ITSA is HMRC’s new system for reporting income digitally. It applies to:

Self-employed sole traders (not through a company)
Landlords
Anyone earning above the income threshold

What Will You Need to Do?

From April 2026, if your gross income from self-employment is over £50,000, you must:

Keep digital records of income and expenses
Use MTD-compliant software to record and submit updates
Send quarterly updates to HMRC
File an end of year submission digitally by 31st January

The income threshold will reduce to £30,000 from April 2027.

What Counts as Gross Income?

It’s the total amount you receive before expenses. For example:

If your sales are £55,000 and expenses are £15,000, you still qualify for MTD because your gross income is over £50,000

Quarterly Updates: What You’ll Report

Every 3 months, you’ll report your income and expenses to HMRC through software. This replaces the single annual tax return.

Updates are due:

5 August
5 November
5 February
5 May

Will You Still Pay Tax Once a Year?

Yes—for now. MTD doesn’t change when you pay tax, just how you report it.

Payments on account and balancing payments still follow the 31 January and 31 July dates

How to Get Ready

Start using digital bookkeeping software now
Keep business and personal finances separate
Ask an accountant to support your MTD setup

Let Me Help You Prepare

I help sole traders like you:

Choose and set up the right software
Learn how to keep digital records
Stay on top of deadlines and submissions

Why It Pays to Prepare Early

Avoid last-minute stress
Reduce risk of missing deadlines
Make the most of accountant support and automation tools

How I’m helping with Making Tax Digital for Income Tax

As an AAT Licensed Accountant with years of MTD experience, I can help with:

Checking when MTD applies to you
Choosing and setting up software like QuickBooks or FreeAgent
Showing you how to use it, or managing it for you
Submitting all required quarterly and annual updates

📞 Let’s chat now – don’t wait until 2026.

Need Help with MTD for ITSA Key Dates and Deadlines?

Get ahead of the curve with expert guidance and ongoing support.

📞 Call: 07867 410938

📧 Email: ross@moorefinancialmanagement.wales

Helping you with Making Tax Digital for Income Tax

Or just email us if you want our:

New Business Start-up Checklist, or;
Business Plan Template, or;
Help with
- Bookkeeping
- Software
- Accounts
- Taxes

Achieving Success with your business

If you’re just starting your new business venture or struggling with the steps to the next level contact us now.

We can help you with this and much more

Get ready for success with Moore Financial Management

We can help you with all of your compliance obligations such as:

Self Assessment Tax
Making Tax Digital
Corporation Tax
Filing Accounts
VAT
Payroll and Pensions

But also the things you really need to increase the chances of your business being a success

Management Accounts
Cashflow Reporting & Forecasting
Budgets
Real Time up to the minute information

These are the things that add value and the information you need in order to make the correct business decisions

If you’re not confident with any of this or don’t have the time, getting a licensed accountant to do it for you can actually save you money. It can free up your valuable time which you can use to concentrate on your business. You can also benefit by knowing it has been done correctly and on time.

Mistakes can be costly.

As can missing deadlines.