From 6 April 2026, Making Tax Digital for Income Tax is mandatory for around 864,000 sole traders and landlords with gross self-employment/property income over £50,000. The first quarterly digital update (covering 6 April–5 July 2026) is due by 7 August 2026, and HMRC is waiving penalty points during year one, with a £200 fixed penalty only after four points accrue from year two. Thresholds drop to £30,000 in April 2027 and £20,000 in April 2028.
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MTD for Income Tax now live: sole traders over £50k must file quarterly
Why this matters for founders
UK founders trading as unincorporated sole traders above £50k must sign up now and keep digital records via HMRC-compatible software, filing four quarterly updates instead of one annual return. Adopt MTD-ready bookkeeping software (spreadsheets need bridging software) before the 7 August 2026 deadline to stay compliant.
Source: IBTimes UK
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