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Making Tax Digital

Sole traders need to register for MTD by April 2026.

Making Tax Digital for Businesses

What is Making Tax Digital?

MTD is HMRC’s plan to digitise the tax system for VAT registered businesses, Income Tax, Self Assessment for sole traders and landlords, Partnerships and Corporation Tax. Its aim is to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.

From April 2026, sole traders with an annual gross turnover in excess of £50,000 will be required to register for MTD for their income tax accounting and reporting. MTD for partnerships will now follow at a later date.

Making Tax Digital for Businesses

How will Making Tax Digital affect me?

If you’re using spreadsheets, you will need to move to a HMRC-recognised software instead.

Making Tax Digital for Businesses

What do I need to do now?

Make sure you’re compliant with MTD by adopting fully compatible software, keeping digital records and signing up before deadlines.

Not sure if you’re affected? Please get in touch.

Making Tax Digital FAQ for Businesses

Does this affect all businesses?

You must comply with MTD rules if your annual gross turnover is more than £50,000 in April 2026. Those with income over £30,000 will be mandated from April 2027.

The government will review the needs of smaller businesses, particularly those under the £30,000 threshold, before announcing any further mandation

The rules for general partnerships with business or property income that only have individuals as partners are under review and will follow at a later date.

Are there any exemptions to MTD?

Income threshold

For now, if your gross turnover from your business(es) and property income is under the £30,000 a year threshold, you can continue to use the current Self-Assessment system.

Digital exclusion

Individuals should not have to follow the MTD for Income tax rules if any of the following apply:

  • It’s not reasonably practicable for them to use digital tools to keep their business records or submit quarterly returns due to age, disability, remoteness of location or any other reason (often referred to as ‘digital exclusion’).
  • They are subject to an insolvency procedure.
  • The business is run entirely by practising members of a religious society or order whose beliefs are incompatible with using electronic communications or keeping electronic records.

Individuals this affects must apply to HMRC to claim an exemption. HMRC have 28 days to grant or deny the application.

Other exemptions

The following are also exempt from MTD for ITSA:

  • Non-resident companies
  • Trustees, executors and administrators
  • Foreign businesses of non-UK domiciled individuals.

What software will I need?

You must check the software you currently use is MTD compatible. The current list of MTD-compatible software for income tax is here.

What do I need to submit?

You must submit quarterly updates for business income and expenses every three months. The deadline dates are as follows:

Quarterly period

Quarterly deadline

6 April to 5 July

5 August

6 July to 5 October

5 November

6 October to 5 January

5 February

6 January to 5 April

5 May

At the end of a tax year (before 31 January), you must make any tax adjustments to an end-of-period statement (which combines all four quarters) and submit this to HMRC.

Any other sources of personal income, such as savings or dividend income, will also need a final declaration to HMRC by 31 January.

What if I run a business as well as being a landlord?

You must keep separate records and make separate submissions for each business. Please refer to our Making Tax Digital for Landlords page if you run a business and you are a landlord.


Do not take any action without speaking to a professional. These articles and related content is provided as a general guidance for informational purposes only.
The information is correct and valid at the time of publication but as it is general guidance, no guarantees can be made regarding its suitability for your particular needs. Critchleys is not liable for any loss or damage whatsoever, including without limitation, any direct, indirect, consequential or incidental loss or damage, arising out of, or in connection with, the use of this information.