Act now. 864,000 sole traders and landlords face new tax rules in two months
- More than 860,000 sole traders and landlords need to start using digital tax reporting from 6 April.
- Software available to help spread tax admin throughout the year, with thousands already testing the system successfully.
- Rollout forms part of the Government’s plan to transform the UK’s tax system to support economic growth.
Sole traders and landlords earning more than £50,000 from self-employment and property are being urged to act now with two months left to prepare for Making Tax Digital (MTD) for Income Tax.
From 6 April 2026, those eligible will need to use recognised software to keep digital records and send HM Revenue and Customs (HMRC) light-touch quarterly updates of their income and expenses. These are not extra tax returns.
HMRC is providing a range of free support to help people prepare, including online guidance, webinars and videos. Those who genuinely cannot use digital tools can apply for an exemption. Further information and guidance are available on GOV.UK
Free software options are available and once income and expenses are recorded, the software generates a simple summary to send to HMRC.
At the end of a tax year, those within MTD for Income Tax will still need to file a tax return by the following 31 January – but the software will already hold the information from the quarterly updates, meaning no last-minute hunt for records or receipts.
Craig Ogilvie, HMRC’s Director of Making Tax Digital, said:
“With two months to go until MTD for Income Tax launches, now is the time to act. A range of software is available and the system is straightforward and helps reduce errors. Thousands of volunteers have already used it successfully.
“This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.
“Spreading your tax admin throughout the year means avoiding that last minute scramble to complete a tax return every January. Go to GOV.UK and start preparing today.”
Thousands of sole traders and landlords have already signed up for MTD for Income Tax, with more than 12,000 quarterly updates successfully submitted through a voluntary testing programme.
Those joining MTD in April 2026 will still file their tax return for the 2025 to 2026 tax year in the usual way by 31 January 2027, as this covers the period before MTD begins. The first MTD tax return, covering the 2026 to 2027 tax year, will be due by 31 January 2028.
To support the transition, the government has announced that customers joining MTD for Income Tax in April 2026 will not receive penalty points for late quarterly updates, for the first 12 months.
Under the new system, penalty points will be given for each late submission, with a £200 penalty only applied once four points are reached. This means occasional slip-ups won’t result in immediate fines.
HMRC is urging those in scope of MTD for Income Tax to act now: read the guidance, choose software and sign up on GOV.UK. Those who use a tax agent should speak to them about preparing.
MTD for Income Tax will be introduced in phases for sole traders and landlords:
| Date joining MTD | Qualifying income | Q1 update due | Q2 update due | Q3 update due | Q4 update due | Self Assessment return due |
| 6 April 2026 | Earned £50,000+ during 2024-25 tax year | 07/08/2026 | 07/11/2026 | 07/02/2027 | 07/05/2027 | 31/01/2028 |
| 6 April 2027 | Earned £30,000+ during 2025-26 tax year | 07/08/2027 | 07/11/2027 | 07/02/2028 | 07/05/2028 | 31/01/2029 |
| 6 April 2028 | Earned £20,000+ during 2026-27 tax year | 07/08/2028 | 07/11/2028 | 07/02/2029 | 07/05/2029 | 31/01/2030 |
Issued by HM Revenue & Customs press office
Act now. 864,000 sole traders and landlords face new tax rules in two months
From 6 April 2026, those eligible will need to use recognised software to keep digital records and send HM Revenue and Customs (HMRC) light-touch quarterly updates of their income and expenses. These are not extra tax returns.
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