Almost half of UK sole traders feel unprepared for upcoming Making Tax Digital for Income Tax (MTD) for Income Tax changes, according to research conducted by IRIS Software.
The new MTD rules, which mandate digital record-keeping and quarterly income tax updates starting April 2026 and non-compliance, can lead to significant penalties.
MTD for Income Tax will require self-employed individuals, landlords and small businesses earning over £50,000 to keep digital financial records and submit quarterly updates using compatible software from April 2026.
The threshold drops to £30,000 in 2027 and to £20,000 in 2028.
Making Tax Digital for Income Tax will become mandatory in phases, starting from 6 April 2026.
You’ll need to use Making Tax Digital for Income Tax if all of the following apply:
The changes could place a significant burden on business owners, who will be required to submit at least five updates to HMRC each year.