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Understand how Making Tax Digital for Income Tax changes help sole traders, landlords, accountants, and bookkeepers.

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What is Making Tax Digital for Income Tax?

MTD for Income Tax is the new way for sole traders and landlords to report their income, expenses, and submit a tax return. This requires digital record-keeping and more regular updates, making it easier to submit end-of-year returns.

How it works: we get you HMRC-ready, sort your finances, and remind you when to update HMRC.

When is MTD going to happen?

Who will MTD apply to?

Sole traders

I am a self-employed sole trader who runs a business that is not VAT registered.

MTD for sole traders

Landlords

I am a landlord who owns and rents property to tenants.

MTD for landlords

How does MTD change Income Tax?

MTD means that you will now need to keep digital records and send quarterly updates to HMRC in addition to the end of year return you submit today.

Digital record keeping

You will be required to record your transactions digitally using software.

Quarterly updates

Send income and expense updates to HMRC at least once per quarter. You will receive up-to-date tax estimates every time you update.

End of year return

You still have to finalise and submit the year-end return and pay the tax by 31st January after the tax year end, but up-to-date tax estimates now mean there will be fewer surprises.

What MTD for Income Tax means for you

Who does Making Tax Digital for income Tax impact?

MTD requirements may vary slightly depending on whether you are a non-VAT registered sole trader, landlord, or accountant. Discover what you need to do, and choose the HMRC-recognised software that helps you meet your needs.

Sole traders

I am a self-employed sole trader who runs a business that is not VAT registered.

MTD for sole traders

Landlords

I am a landlord who owns and rents property to tenants.

MTD for landlords

Accountants

I am an accountant who manages accounting, tax, and finances for clients who need to comply with MTD,

MTD for accountants

Making Tax Digital compatible software

How do I comply with MTD?

Get on top of tax now, before the rush and find the right software for you. No long-term contracts, commitments, or hidden fees. Upgrade or cancel anytime.

Most popular

Sole Trader Free

Ideal for <strong>non-VAT</strong> registered sole traders wanting to simplify manual record keeping and taxes.
Free
No hidden charges
Completely free, no billing.
AI features

Features

Sole Trader

Ideal for <strong>non-VAT</strong> registered sole traders wanting to manage self assessment and cashflow.
per month / excl. 20% VAT*

AI features

Features

Everything from Free and :

*Get 3 months free on Sage Sole Trader, then £7 per month (excluding VAT). Terms and conditions apply.

How will MTD for Income Tax help me?

See how our software helps sole traders, landlords, and accounting clients stay compliant, prepped for Income Tax Self Assessment, and saves on time.

“Submitting your business updates on a more regular basis will make you aware of how much you’ll owe and make budgeting easier. Sorting my taxes digitally has been like having a fairy godmother for my tax admin.” 

Heather Moor
​Princess one Snow Princess Parties

“I’m saving 72 hours a year since moving to digital tax returns with Sage! It takes me a fraction of the time to tally everything up. Once you make the switch, it will save so much time”

Charlotte Thomas
​CreatedbyLottie

"It's just really simple, I’ve also gained the peace of mind of knowing that it's not all down to me to add everything up”

Helene Fleming
​Highland Healing Space

"Doing my taxes digitally moving forward is going to halve the amount of time I spend on my financial admin. I would urge other business owners not to be scared about moving to digital tax returns. Making Tax Digital is without a doubt going to be beneficial."

Heather Moor
​Princess one Snow Princess Parties

“The last thing business owners wanted to hear [during Covid] was, ‘you now need to digitise your records’. We knew we would need the help of Sage Accounting for this task.”

Maylynda Pacitti
Pacitti Hamilton

“Sage Accounting is life changing. It's cost effective, it's flexible, and really, I’d say ‘can you afford not to have Sage Accounting?”

Maylynda Pacitti
Pacitti Hamilton

“We have saved at least 10 hours a month on data input being able to use auto entry with sage. Being cloud based and working from home I can use Sage anywhere, anytime. This has made a big difference.”

Heather Morris
A&B Plumbing & Heating

“Sage Accounting has streamlined our whole business and saved us so much time and frustration! It has also made.”

Donna Reekie
Accurate Cooling Services (London) Ltd.

“I think the fact you can almost be your own accountant with Sage, it just makes it amazing - Sage works great for me.”

Sarah Barnes
Who Lets Your Dogs Out

“Sage Accounting just makes my accounts, invoicing, expense management seamless and easy! It saves me 4 hours a week, so probably £20k a year, which is a lot for a one man band business!”

Richard Briars
Beanz Consulting Limited

MTD for Income Tax news, advice, and more

Find news and advice to discover more about MTD for Income Tax, what it means for you, and make quarterly tax returns stress-free.

Explainer video

What's changing with the way you file Income Tax

Uncover what Making Tax Digital entails and how it benefits you.

Sage Advice article

Making Tax Digital for Income tax: The complete guide

Discover everything you need to know about MTD in detail from our team of experts.

Read more
Sage Advice article

Why Making Tax Digital for Income Tax will make life easier for your business

Find out how MTD can help streamline your business admin, freeing up time for everything else.

Read more
Sage Advice article

MTD Mythbuster: 8 myths about Making Tax Digital dispelled

Worried about what MTD means for you? Our experts debunk the biggest myths about going digital.

Read more
Read more on MTD

MTD for Income Tax FAQs

HMRC is introducing Making Tax Digital to digitise the UK tax system so that it is more accurate, efficient, and durable. This will help businesses reduce time spent on tax admin, and will create a modern system that's no longer reliant on paper.

Read more about the introduction of MTD.

Using HMRC-recognised accounting software will allow you to comply by keeping accurate digital records and helping you submit quarterly updates directly to HMRC. Sage provides free and billed solutions, depending on your needs.

Getting yourself set up with MTD software will help you comply with MTD rules and avoid costly penalties.

With the right HMRC-approved accounting software in place, you'll also be able to streamline your financial processes and digitise your accounts, saving your business valuable time and money.

MTD-compliant software from Sage is easy to set up and use. Once it's in place, you can:

  • Generate professional sales invoices from wherever you are.
  • Create records from sales invoices, bank feeds, receipt scans, or manual uploads.
  • Calculate and manage your income and expenses.
  • Easily create self-employed income tax summaries.
  • Create copy-and-paste totals to complete your Income Tax Self Assessment return.
  • Submit quarterly tax returns in just a few clicks.
  • Use the Sage app on your phone or tablet and work on the go.
  • Reduce the amount of paperwork you have to deal with.
  • Access real-time data to better understand your business performance.
  • Keep track of funds and view who owes you money.
  • Securely and easily manage your bookkeeping in one place.
  • Get more time back to focus on your business.

Making Tax Digital compatible software will make it simple for you to stay compliant, while keeping on top of your finances.

MTD already applies to VAT-registered sole traders and small businesses.

The next MTD deadlines are for Income Tax and will apply in phases to all self-employed individuals and landlords with qualifying income above the below thresholds. Accountants with clients who meet these criteria will need to support them in compliance.

6 April 2026 - incomes over £50,000

6 April 2027 - incomes over £30,000

6 April 2028 - incomes over £20,000

You will need to get started now to ensure your digital records are in place for the 2024/2025 income tax year currently underway. This ensures that when you come to submit the required quarterly updates from 2026 onwards, and year-end Self Assessment, you have everything you need. 

Skip the rush and beat the stress of tax admin and get MTD ready today. Sage supports you with the opportunity to get on top of the requirements today and better organise your admin.

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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