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Guide · Sole traders

Making Tax Digital for the self-employed

The short answer

If you are a sole trader and your self-employment income, plus any property income, is over £30,000 before expenses, Making Tax Digital starts for you on 6 April 2027. You keep your records in software, send HMRC four quarterly updates and file your tax return through the same software.

Compare accountantsAbout Making Tax Digital →

Prefer to talk? Call 0330 057 7175

A self-employed tradesman smiling from the driver’s seat of his van

£30,000

turnover from 6 April 2027, before expenses

4.50m
self-employed people in the UK (ONS, Jul 2025 to Jun 2026)
6 Apr 2027
start date for qualifying income over £30,000
4
quarterly updates a year, plus a tax return
7 Aug 2027
first update due for the April 2027 group

Who is in

Does Making Tax Digital apply to you?

It applies if you are a sole trader registered for Self Assessment and your qualifying income is over the threshold. Qualifying income is your turnover from self-employment, added to any property income, before you take off expenses. A £35,000 turnover with £15,000 of costs is still £35,000.

HMRC looks back at an earlier tax return to set your start date. Over £30,000 on your 2025 to 2026 return means you start on 6 April 2027. Our MTD checker works it out in a few seconds.

  • Trades and services: builders, electricians, hairdressers, consultants, drivers and anyone else working for themselves.
  • A job plus a side business: only the side business counts towards the threshold, not your salary.
  • More than one business: add the turnovers together. Each business then sends its own updates.
  • Limited company directors: the company is not covered. Only self-employment or property income in your own name counts.
  • Partners in a partnership: not covered yet. HMRC has not set a date.

What changes

What sole traders have to do differently

  • Keep digital recordsRecord each sale and expense in software: the amount, the date and the category.
  • Send quarterly updatesA summary of the tax year so far, four times a year.
  • Make year-end adjustmentsCapital allowances, disallowable costs and other tax adjustments, as now.
  • File the tax returnThrough your software, by 31 January, which is also when the tax is due.

Retailers can record their daily takings as one figure instead of every sale. If you use simplified expenses, such as the flat rate for working from home, you do not need records of the actual costs. HMRC sees category totals, never your individual receipts.

Deadlines

Quarterly update deadlines

Each update covers the tax year so far, from 6 April. If your accounts run to 31 March, you can use calendar quarters, which have the same deadlines.

Update coversSend it by
6 April to 5 July7 August
6 April to 5 October7 November
6 April to 5 January7 February
6 April to 5 April7 May

There are no penalty points for late quarterly updates in the 2026 to 2027 tax year. From April 2027 they count, and 4 points means a £200 penalty. See MTD penalties and exemptions for how points and late payment work.

A restaurant owner standing in his dining room

Rather keep your head down and work?

Most sole traders hand MTD to an accountant who keeps the records, sends each update and files the return. We will match you with up to 4 local Making Tax Digital accountants.

Compare accountants

Software

Software, apps and spreadsheets

You need software that HMRC recognises. Many work as a phone app, so you can snap receipts as you go. If you like your spreadsheet, bridging software can send its figures to HMRC instead. Our guide to MTD software explains the options.

Once a figure has gone to HMRC in an update, it has to stay in your digital records. You cannot retype it by hand into other software.

Starting in April 2027?

Your sole trader checklist

  1. 1Check your 2025 to 2026 turnover, plus any rental income.
  2. 2Decide between doing it yourself and using an accountant.
  3. 3Pick software, or bridging software for your spreadsheet.
  4. 4Open a separate bank account for the business if you have not already.
  5. 5Sign up on GOV.UK, or let your accountant do it.
  6. 6Start recording from 6 April 2027 and diarise 7 August.
Get an accountant to do it
A sole trader reading a tax letter at his kitchen table

The dates that matter

  1. 6 Apr 2026Started for qualifying income over £50,000 (2024-25 return)
  2. 7 Nov 2026Second quarterly update due for the April 2026 group
  3. 6 Apr 2027Starts for qualifying income over £30,000 (2025-26 return). Penalty points for late quarterly updates begin
  4. 7 Aug 2027First quarterly update due for the April 2027 group
  5. 31 Jan 2028First MTD tax return and payment due for 2026-27
  6. 6 Apr 2028Starts for qualifying income over £20,000 (2026-27 return)

Questions people ask

MTD for the self-employed: your questions

Is the £30,000 threshold turnover or profit?

Turnover. Qualifying income is your self-employment income before expenses, plus any property income before expenses. Source

I have a job and a small business. Does my salary count?

No. Employment income does not count towards qualifying income, so only the business turnover and any rental income are added up. Source

I have two businesses. Do I add them together?

Yes. All your self-employment and property income counts towards the threshold. Once you are in, each business sends its own quarterly updates. Source

Can I record my daily takings as one figure?

Yes, if you are a retailer. You can record daily gross takings instead of each sale. Source

How long must I keep my digital records?

At least 5 years after the 31 January deadline for the tax year, the same as for Self Assessment. Source

Do I need an accountant?

No, it is not a legal requirement. Many sole traders choose one so the updates and the return are done for them. You authorise them as your agent with HMRC. Source

Guides

MTD for Income Tax explainedWho is in, the dates, quarterly updates and what it costs.Making Tax Digital for landlordsRental income, joint ownership and overseas property.Self-employed tax calculatorHow much tax and NI to set aside each quarter.Self-employed mileage calculatorThe 55p rate or actual costs: which claims more.MTD deadline calendarEvery update and payment date, added to your calendar.Do I need to use Making Tax Digital?Check your qualifying income and start date.MTD software or an accountant?Software, spreadsheets and bridging tools compared.How to sign up for Making Tax DigitalSigning up yourself, or letting an accountant do it.MTD penalties and exemptionsPenalty points, late payment and who is exempt.Accountants for small businessWhat they do, what to ask and what they cost.MTD for builders and CIS subcontractorsHomeowner and contractor work, CIS and the reverse charge.MTD for plumbers and electriciansDeposits, van stock, scheme fees and card payments.MTD for taxi and delivery driversSeveral apps, platform reports and car costs.MTD for hair and beautyRent-a-chair, tips, products and mobile work.MTD for cleaners and carersMany small clients and travel between them.

Sources

Written by the Compare Advantage team, Chorley. Facts checked against GOV.UK on 3 November 2026.

Compare Advantage is an introduction service. We are not an accountancy firm and do not give tax advice. We will contact you to introduce a local accountant who handles Making Tax Digital, and we tell you which firm before we pass on your details. Firms may pay us for the introduction. Guidance on this page is general and based on the GOV.UK sources linked on each page.