Making Tax Digital, for people who work on their own

Last checked against gov.uk on 20 August 2026

The radio adverts make this sound simple and the accountancy websites make it sound terrifying. It is neither. Here is what actually changes if you are a sole trader, with the dates and the numbers, and nothing you do not need.

The short version: if your self-employment and property income is over a threshold, you have to keep digital records and send HMRC a summary every three months instead of doing one Self Assessment and forgetting about it. Which year you start depends on how much you earned in an earlier tax year — that catches people out.

When you have to start

The threshold is your qualifying income — turnover from self-employment plus any property income, added together, before expenses. Not profit. This is the single most common misunderstanding.

Over £50,000in the 2024–25 tax year

Start using it from 6 April 2026

Already live. HMRC should have written to you. You can still sign up if you have not.

Over £30,000in the 2025–26 tax year

Start using it from 6 April 2027

If you had a good year in 2025–26, this is you — even if the next year is quieter.

Over £20,000in the 2026–27 tax year

Start using it from 6 April 2028

This is the one that catches most one-person trades. £20,000 turnover is not a big year.

Note the gap: you are judged on a tax year that has usually already finished by the time you have to act. If you turn over £22,000 this year, you are in scope from April 2028 whatever happens between now and then.

Partnerships are coming too, but HMRC has not published a date.

What you actually have to do

Keep digital records of income and expenses. A shoebox of receipts and a notebook stops being enough.
Send a quarterly update to HMRC — a summary of income and expenses, four times a year, through compatible software.
Still file a year-end return. The quarterly updates do not replace it. This surprises people who assumed four returns meant no annual one.

It is not four tax bills. A lot of people assume quarterly reporting means paying tax quarterly. It does not — the updates are information, not payment demands. Your payment dates do not change.

Do you need to pay for software?

You need something HMRC recognises as compatible. That does not have to be expensive, and if you already use a business bank account, check what is included — some bundle bookkeeping software for sole traders.

What matters is that your records are digital and complete. Most of the pain people report is not the filing, it is arriving at the quarter end with a pile of paper and no idea what was invoiced. If your quotes and invoices are already digital as you go, the quarterly update is mostly a lookup.

Being straight about where we come into this

We are building QuoteSnug — quoting and invoicing for one-person trades. It is not built yet and it does not file to HMRC. Filing requires certification that is a serious undertaking, and claiming otherwise would be misleading.

What it does is keep your quotes and invoices in order as you go, so the records exist when your accountant or your filing software needs them. If you want a single tool that keeps records and files, you want full bookkeeping software, and you should go and get some. We would rather tell you that than sell you something that does not fit.

Want to know when QuoteSnug is ready?

£10 a month, one person, no seat minimum. One email when it is ready to try, nothing else.

Where these numbers come from

Find out if and when you need to use Making Tax Digital for Income Tax — the threshold and date ladder.
Work out your qualifying income — what counts toward the threshold.
Sign up for Making Tax Digital for Income Tax
VAT registration threshold — separate from MTD, currently £90,000.

This is a plain-English summary, not tax advice. HMRC changes the detail fairly often — the gov.uk pages above are the authority, and if your situation is complicated, ask an accountant.

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