Making Tax Digital
What UK sole traders, landlords and VAT-registered businesses need to know about digital records and HMRC reporting.
Making Tax Digital (MTD) is HMRC's programme for keeping and submitting certain tax records digitally. MTD for VAT already applies to VAT-registered businesses. MTD for Income Tax is now live for qualifying sole traders and landlords with income over £50,000, with further phased thresholds to follow.
MTD for VAT
If your business is registered for VAT, you normally need to use compatible software to keep VAT records and submit VAT Returns through MTD. This does not mean that every task needs to be automated, but the figures submitted to HMRC must travel through a compatible digital link.
MTD for Income Tax
MTD for Income Tax began on 6 April 2026 for qualifying sole traders and landlords with income over £50,000. The announced rollout extends to qualifying income over £30,000 from April 2027 and over £20,000 from April 2028. In-scope taxpayers keep digital records, send quarterly updates, and complete an end-of-period process rather than following an annual-only workflow.
The rules, start dates and exemptions can change. Use our eligibility checker as a planning aid, then confirm your position with HMRC or an accountant before making a compliance decision for your business.
What to do now
Start by separating business money, keeping your sales and expense records up to date, and choosing software that works for your business. Good records are useful even before MTD is compulsory: they reduce year-end stress and make it easier to see your cash and tax position.
Guides in this hub
Check the current planned MTD for Income Tax timeline for your qualifying income.
Choose software that can support digital records and regular reporting.
Build digital records that can support accurate tax reporting.
Check whether VAT registration — and MTD for VAT — may apply.
Compare leading accounting platforms for small businesses.
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