Making Tax Digital for Income Tax has already started for some people.

And the next wave is coming sooner than you might think. 🚨

If you’re a sole trader or landlord, here’s what you need to know, and why the Self Assessment return you file this January could decide whether you’re affected. 👇

Making Tax Digital for Income Tax (often called MTD for ITSA) changes how sole traders and landlords report their income to HMRC.

Instead of one Self Assessment return each year, you’ll need to:

✅ Keep your business records digitally, using compatible software ✅ Send quarterly updates to HMRC ✅ Submit an end-of-period statement ✅ Complete a final declaration by 31 January after the tax year ends

It’s a big change from keeping everything in a shoebox until the deadline. 😅

The rules apply in stages, based on your qualifying income:

🔹 From 6 April 2026: qualifying income over £50,000 🔹 From 6 April 2027: qualifying income over £30,000 🔹 From 6 April 2028: qualifying income over £20,000

If you’re already in the £50,000 group, your next quarterly update is due by 7 November.

This is where people get caught out.

It’s your gross income (turnover) from self-employment and property before expenses, not your profit.

For example:

💷 Self-employed turnover: £28,000 💷 Rental income: £4,000

Total: £32,000

Even if your profit is much lower, you could be caught from April 2027. (This is just an illustration. Your own position will depend on your circumstances.)

HMRC is expected to use your 2025/26 return, the one you’re filing now, to decide whether you’re in. That’s why it matters this January.

Most people will send updates by:

🔹 7 August 🔹 7 November 🔹 7 February 🔹 7 May

These are summaries of your income and expenses, not a full return, but they do rely on up-to-date records. Late updates can lead to penalty points, and enough points lead to a financial penalty.

Limited companies are not covered by Making Tax Digital for Income Tax. But if you’re a director who also has self-employed or rental income, you could still be affected personally.

If you might be affected, there are three simple steps:

✅ Check your gross income for 2025/26, including any rental income ✅ Keep your records up to date and separate business and personal spending ✅ Speak to your accountant about software and how updates will work

Starting early means you can get comfortable with the process before the deadline, rather than learning it under pressure.

At Llewellyns Chartered Certified Accountants, we help sole traders and landlords check whether they’re affected, choose the right software and keep on top of their reporting, in plain English. 😊

We offer a free, no-pressure initial chat, so you can find out where you stand.

📍 Cardiff: 02920 624230 📍 Tonypandy: 01443 303230 📧 info@llewellyns.co.uk