MTD for sole traders

If you’re self-employed, Making Tax Digital changes how you keep records and report to HMRC. Here’s what to expect and how to get ahead of it.

Updated July 2026 · A general guide, not personal tax advice.

When does it apply to you?

Making Tax Digital for Income Tax is phased in by income: from 6 April 2026 if your combined gross self-employment and property income is over £50,000, from April 2027 over £30,000, and from April 2028 over £20,000. It’s based on gross income (turnover), not profit. See the full MTD overview.

What you’ll need to do

• Keep digital records of your income and expenses (not paper or memory).
• Send HMRC four quarterly updates through compatible software.
• Submit a Final Declaration after the tax year to confirm your figures — this replaces the old Self Assessment return.
• Keep a digital link from your records to the numbers you submit.

Get the basics right

Track every business expense (with receipts), claim mileage at the correct HMRC rate, and remember the £1,000 trading allowance — if your income is under £1,000 you may not need to report it at all, and if it’s over you can choose to deduct the allowance instead of actual expenses. More detail in our allowable-expenses guide.

How to prepare now

The easiest way to be ready is to keep records digitally from the start of the tax year, so quarterly updates are a click rather than a scramble. FTrak lets you log income, snap receipts, track mileage and file to HMRC in one place — see FTrak for sole traders.