How to calculate self employed income tax
Find out everything you need to know to calculate self employed income tax, including the tax bands and rates, and how to submit your taxes.
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Whether you're an accountant, bookkeeper, small business owner, landlord or sole trader, get all of the information and the solutions you need to meet MTD legislation.
Making Tax Digital (MTD) is HMRC’s plan to digitise the tax system for VAT, Income Tax Self Assessment and Corporation Tax for businesses. MTD aims to make tax returns simpler and more efficient for everyone.
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is the next step in the MTD timeline from HMRC.
From April 2026 if you have an income of over £50,000 annually, from self employment or property rental, you'll need to use MTD compatible software to:
Now applies to all VAT-registered businesses.
Small businesses, landlord, or sole trader still looking for an MTD for VAT solution?
MTD for Income Tax Self Assessment will apply if you have an annual self-employment or property income of more than £50,000. Learn why MTD for ITSA has been delayed.
Start managing your income and expenses with confidence today. Whether you're an accountant or small business, your Sage solution has what you need to be MTD ITSA compliant.
MTD for ITSA legislation will require accountants and their clients to use MTD compatible software to keep digital records and submit summary income and expense data quarterly.
Sage for Accountants software is recognised by HMRC as MTD compatible. You can use it to:
From 6 April 2026 many small businesses, sole traders, and landlords need to begin using MTD compatible software to keep digital records and submit summary income and expense data quarterly.
Sage Accounting is an HMRC-recognised, MTD-ready software which provides functionality for MTD requirements as they come into effect allowing you to remain compliant. You can use it to:
Find out everything you need to know to calculate self employed income tax, including the tax bands and rates, and how to submit your taxes.
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Making Tax Digital is HMRC legislation designed to make it easier for tax payers to get their taxes right. By complying with MTD legislation and adopting compliant software, businesses or their accountants can easily view tax information in one place and complete taxes more efficiently.
The first phase of MTD started in April 2019, mandating that most VAT registered businesses with taxable turnover over £85,000 keep digital tax records. In April 2022 MTD for VAT was extended to all VAT registered businesses, including those below the VAT threshold.
These are the upcoming dates to take note of :
April 2026 : MTD for Income Tax Self Assessment mandates unincorporated (sole traders and partnerships) businesses and landlords with income above £50,000.
April 2026 : The earliest possible date for MTD for Corporation Tax after the government announced it wouldn’t be mandated before then.
April 2027: MTD for Income Tax Self Assessment mandates unincorporated (sole traders and partnerships) businesses and landlords with income above £30,000.
There are also a number of future dates on the HMRC timeline to be confirmed:
MTD for ITSA Sole traders & landlords with income under £30,000
MTD for ITSA General partnerships
MTD for Corporation Tax
With MTD compatible software you can:
We’re working closely with HMRC and the UK Government to represent UK businesses and we’ve got over 40 years’ compliance expertise to help accountants, bookkeepers, sole traders, and small business owners meet MTD requirements.
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