Making Tax Digital for sole traders and landlords

If you are VAT registered, yes. MTD for VAT has been mandatory since April 2022, so digital records and software submission already apply. If you are a sole trader or landlord, check your qualifying income against the thresholds: April 2026 for over £50,000, April 2027 for over £30,000 and April 2028 for over £20,000. If you are within a few thousand pounds of a threshold, set compatible software up before your date.

Your total gross income from self-employment and property combined, before expenses, taken from the Self Assessment return for the relevant earlier tax year. It is turnover before costs, so a landlord with £55,000 of rent and £20,000 of costs is over the £50,000 threshold. It combines sources, so a £30,000 trade plus £25,000 of rent qualifies even though neither does alone. And it is based on a past return, so your obligation can be triggered by a year that has already happened.

Instead of one Self Assessment return a year, you keep digital records and send a quarterly update of income and expenses for each business or property source, then an End of Period Statement for each source and a single Final Declaration to confirm the year. That is four updates a year, plus a year-end process much like today’s return. The quarterly updates are cumulative summaries, and nothing becomes payable earlier because of them. The payment dates stay 31 January and 31 July.

No. MTD changes how and how often you report figures. The tax rules, the rates and the allowances all stay as they are, and any change to your bill comes from your actual income and expenses. People who previously estimated expenses loosely and reconstructed a year in January often find their claims fall once records are kept properly. The cost of compliance does rise: software, four submissions and more of your attention through the year.

You get a penalty point. Reach four points and HMRC issues a £200 penalty, then a further £200 for every subsequent missed submission. Points expire after 24 months if you stay below the threshold. Once you have hit four, you need twelve consecutive on-time submissions to reset. Late payment is penalised separately from late filing, and interest runs regardless.

Only if it is linked to HMRC-recognised bridging software that can submit directly from it, and the digital link between the spreadsheet and the submission must be genuine. Copying figures across by hand breaks the digital record-keeping requirement. A bridged spreadsheet means two products to maintain, a manual step where errors can enter, and no receipt capture. FreeAgent is included in every Buzz package and handles records and submission in one place.

Possibly. Exemption is available where it is not reasonably practicable for you to use digital tools because of age, disability, location (genuinely no reliable internet) or religious belief, and it has to be applied for and granted by HMRC. Trusts, estates and certain partnerships have their own timetable. Finding computers difficult is not, on its own, sufficient. If you think you might qualify, apply well ahead of your mandation date, because a refused application close to the deadline leaves no time to prepare.

There is no confirmed date. HMRC’s 2025 Transformation Roadmap confirmed MTD for Corporation Tax is not proceeding as first planned, and a different approach is still being worked out. Limited companies should keep filing Corporation Tax as they do now. Digital records, more frequent reporting and software-based filing are still where HMRC is heading, and a company already keeping clean digital records will find whatever arrives less disruptive.