Making Tax Digital: Are You a Sole Trader or Landlord Earning Over £30,000? Now Is the Time to Prepare

Making Tax Digital: Are You a Sole Trader or Landlord Earning Over £30,000? Now Is the Time to Prepare

Making Tax Digital for Income Tax becomes mandatory from April 2027 for sole traders and landlords with qualifying income over £30,000. If this affects you, now is the time to get ready — and Kennedys Accounting can help.

HMRC estimates that more than one million taxpayers will be affected by the next phase of Making Tax Digital (MTD). With many currently managing their own tax returns, the change could be a significant adjustment.

What does Making Tax Digital mean for you?

From 6 April 2027, eligible sole traders and landlords will need to maintain digital records of their income and expenses and submit quarterly updates to HMRC using compatible software.

Instead of simply preparing one Self Assessment tax return each year, you will need to keep your records digitally and report throughout the year.

HMRC has emphasised that quarterly updates are summaries rather than additional tax returns. However, the new requirements will still mean a change to how you manage your finances, keep records and meet your tax obligations.

Important: The £30,000 threshold is based on qualifying gross income from self-employment and property, before deducting expenses or tax allowances. It is not your profit.

The threshold is also scheduled to fall to £20,000 from April 2028, bringing more sole traders and landlords into the system.

Don’t leave it until the last minute

HMRC has already experienced challenges getting taxpayers in the first MTD cohort signed up, with automatic enrolment used for those who missed the initial deadline.

With the next phase affecting an even larger group, preparing early gives you time to understand the requirements, choose suitable software and establish a routine that works for your business or property income.

There are also questions around penalties and whether any transitional concessions will apply to the April 2027 cohort. It is sensible to understand your obligations rather than assume there will be a grace period.

How can Kennedys Accounting help?

You don’t have to navigate Making Tax Digital alone.

At Kennedys Accounting, we can help you understand whether MTD applies to you, choose an appropriate software solution and put the right processes in place for recording your income and expenses. We can also explain the quarterly reporting requirements and discuss the level of support that best suits your circumstances.

Getting organised now can help make the transition far less stressful.

Are you a sole trader or landlord with qualifying income over £30,000? Contact Kennedys Accounting today to discuss how we can help you prepare for Making Tax Digital before April 2027.