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MTD for Income Tax is here: what sole traders and landlords over £50k need to do now



If you’re a sole trader or landlord and your turnover is over £50,000, the way you manage and report your Income Tax has officially changed.


It became official on 6 April 2026, that you need to comply with Making Tax Digital (MTD) for Income Tax. In plain English: you’ll keep digital records, send updates to HMRC during the year, and still submit a final tax return.


This blog breaks down what action you need to take, what the new process looks like, and how to get ready without the last-minute panic.


First: who needs to follow MTD for Income Tax from 6 April 2026?


You’ll need to use MTD for Income Tax from 6 April 2026 if:


  • You’re self-employed (sole trader) and/or a UK landlord

  • Your turnover is above £50,000


If you’re not sure whether you’re in scope, it’s worth checking now rather than guessing. Feel free to get in touch.


What’s actually changing?


MTD for Income Tax is the biggest change to Income Tax reporting since Self Assessment began.


The key shift is this:

  • You’ll make quarterly submissions to HMRC rather than just annual

  • You’ll need to have compliant software


That sounds like “more work” at first glance, but for many people it’s a better rhythm: smaller, regular check-ins rather than one big stressful scramble.


The 3 things you’ll need to do under MTD for Income Tax


1) Use recognised software to keep digital records for:


  • Income

  • Expenses


You’ll need to use recognised software for example, at Redwood Bookkeeping we use Xero.

If you currently use spreadsheets, you may still be able to keep them — but you’ll need bridging software to connect your spreadsheet records to HMRC. The simplest way is to use cloud software, just like we do.


2) Send quarterly updates to HMRC


Instead of waiting until the end of the tax year, you’ll send quarterly updates to HMRC from your software.


Think of these as regular snapshots of your income and expenses across the year.


3) Submit your tax return by 31 January


You’ll still submit your tax return by 31 January each year.


So yes, the annual deadline remains, but the difference is you’ll be building up the information as you go.


What action should you take now? (Your MTD checklist)


Here’s the practical “do this next” list.


Step 1: Confirm your start date


If your turnover is above £50,000, your start date is 6 April 2026.

If you’re close to the threshold, or your income comes from multiple sources, it’s smart to confirm where you stand so you’re not caught out.


Step 2: Choose your software


You’ll need to pick recognised software that suits how you work.


When choosing, consider:


  • Do you want something simple and mobile-friendly?

  • Do you need it to handle property income as well as self-employed income?

  • Are you currently spreadsheet-based (and would bridging software be a better fit)?

  • What’s your budget? Are you happy to pay for something with more support and features?


Step 3: Sign up (don’t leave it late)


Once you know you’re in scope and you’ve chosen your software, the next step is to sign up for MTD for Income Tax before your start date.


This gives you breathing room to:


  • Get your setup right

  • Learn the system

  • Build the habit of keeping records regularly


How Redwood Bookkeeping can help


If you’re thinking, “This sounds like a lot to take in,” you’re right, but you don’t have to do it alone.


We can help you make MTD feel like a process you can actually stick to, by:


  • Helping you choose the right software for your setup (sole trader, property income, or both)

  • Getting everything set up correctly from the start (so you’re not untangling errors later)

  • Creating a simple record-keeping routine that fits around your working week

  • Keeping your records tidy and up to date, so quarterly updates are straightforward

  • Spotting gaps early (missing invoices, uncategorised expenses, messy bank feeds) before they become a bigger headache

  • Giving you peace of mind that what you’re submitting is consistent and supported by your records


For many sole traders and landlords, the biggest win is confidence: you know what’s happening, what’s due, and you’re not trying to fix everything in January.


A quick word if you’re already busy (and who isn’t?)


If you’re thinking, “Quarterly updates? I barely get time to look at my bookkeeping monthly,” you’re not alone.


The easiest way to make MTD feel manageable is to set up a simple routine:


  • Keep on top of your records

  • Book a recurring admin slot (even 30 minutes weekly helps)

  • Get support with setup if software isn’t your thing


Need help getting ready for MTD?


If you’d like support choosing software, setting up a process that actually sticks, or keeping on top of the admin throughout the year, this is exactly the sort of thing we help with.

Want to chat through what this looks like for your business? Drop us a message and we’ll point you in the right direction.


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