Making Tax Digital and Student Loans: What Sole Traders and Landlords Need to Know

Making Tax Digital and Student Loans: What Sole Traders and Landlords Need to Know

If you are self-employed, a sole trader or a landlord with qualifying income above £50,000, Making Tax Digital (MTD) for Income Tax now changes how you report your figures to HMRC. If you also repay a student or postgraduate loan, there is another important detail to understand: your quarterly figures are estimates, while your final repayment is calculated through your annual tax return.

What happens during the year?

You or your accountant will keep digital records of your self-employment and property income and expenses. Every three months, those records will be used to send summary updates to HMRC.

HMRC should add your student loan plan or postgraduate loan information automatically. The software can then show an estimated repayment alongside your tax estimate. This is helpful for budgeting, but the estimate is not an amount you need to pay each quarter. You should also make sure your accountant is aware of your student loan.

When is the final repayment calculated?

After the tax year ends, you will still need to complete and submit an annual tax return. This is when your actual student or postgraduate loan repayment is calculated using your total annual income and the threshold for your loan plan.

The final figure replaces the quarterly estimates and forms part of your overall Self-Assessment liability, normally payable by 31 January following the end of the tax year.

What if repayments were taken through PAYE?

If you also have employment income, your employer may already have deducted student or postgraduate loan repayments through PAYE. HMRC should include these amounts and offset them against your final Self-Assessment calculation. Always check the pre-populated information against your P60, payslips and Student Loans Company account before submitting.

Key dates and practical steps

For those brought into MTD from April 2026 because qualifying income is above £50,000, the first quarterly update deadline was on 7 August 2026.

To stay on track:

• confirm whether MTD applies to you;
• check loan details and PAYE deductions carefully; and
• set aside funds using the estimates as a guide.

Need help getting MTD-ready?

MTD does not have to mean more stress. Kennedys Accounting can help you understand whether the rules apply, choose the right software, check your records and prepare accurate submissions. Contact our friendly team today to arrange a conversation and get ready with confidence.

Email – info@kennedysaccounting.uk

Telephone 01233 539501