Making Tax Digital: What Sole Traders and Landlords Need to Know
Making Tax Digital is already here for some taxpayers
Making Tax Digital for Income Tax changes how affected sole traders and landlords keep records and report income to HMRC.
From 6 April 2026, it applies to those with qualifying income above £50,000 for 2024/25, subject to exemptions. Affected taxpayers need digital records, compatible software and quarterly updates.
When do the next groups join?
The current rollout is:
| Start date | Qualifying income |
|---|---|
| 6 April 2026 | Over £50,000 in 2024/25 |
| 6 April 2027 | Over £30,000 in 2025/26 |
| 6 April 2028 | Over £20,000 in 2026/27 |
Your circumstances and any available exemption also need checking.
It’s income, not profit
This is an easy point to miss. Qualifying income generally means your combined gross income from self-employment and property, before expenses.
For example, £24,000 from self-employment plus £12,000 in rental income gives combined qualifying income of £36,000. Looking at each source separately could leave you with the wrong answer.
What should you do now?
Start with three practical steps:
- Check the relevant tax return to establish your qualifying income.
- Review how you record business and rental transactions.
- Speak to your accountant before choosing software.
Buying an app is not the whole job. Your records still need to be complete, correctly categorised and kept up to date.
If you’re a sole trader or landlord in Birmingham, speak to Taxlite about what the changes mean for your circumstances.