Local Accountants | Business At

Local accountants are crucial for UK sole traders and landlords navigating the upcoming Making Tax Digital for Income Tax changes starting 6 April 2026.

This article covers key deadlines, benefits, exemptions, software choices, and how to sign up, ensuring you stay compliant and avoid penalties.

Key Deadlines for Making Tax Digital

From 6 April 2026, over 864,000 sole traders and landlords with income over £50,000 must use Making Tax Digital for Income Tax.

They need to keep digital records and send quarterly updates to HMRC using recognised software.

A points-based penalty system applies, with £200 fines after four points, but no points in the first year for new joiners.

Advantages of Digital Tax Compliance

Making Tax Digital helps avoid errors and makes submitting tax returns easier for businesses.

Benefits include time saving, increased tax confidence, and improved operations.

Penalties are points-based for late submissions, with financial penalties only for repeated missed deadlines.

Early sign-up provides access to dedicated HMRC support teams.

Understanding MTD Exemptions

Exemptions from Making Tax Digital are available for various reasons.

Automatic exemption applies if qualifying income is £20,000 or less, or for those without a National Insurance number.

Temporary exemptions until April 2027 are given for claims like averaging relief.

Some exemptions require an application, such as for digital exclusion.

Selecting Compatible Software

From 6 April 2026, sole traders and landlords must use compatible software for Making Tax Digital.

Software must create digital records, send quarterly updates, and submit tax returns to HMRC.

Options include full digital record software or bridging software for existing systems.

Users can choose multiple products for different income sources.

Steps to Sign Up for MTD

Sole traders and landlords must sign up for Making Tax Digital if income exceeds £50,000 from 6 April 2026.

To sign up, be registered for Self Assessment and have submitted a tax return in the last 2 years.

Penalty points for late updates won't apply in the first tax year for mandatory joiners.

Voluntary sign-up is possible earlier, such as for the 2025-26 tax year.

Ready to Simplify Your Tax Compliance?

Sources:

• Act now: 864,000 sole traders and landlords face new tax rules in two months - GOV.UK
• Benefits of Making Tax Digital - GOV.UK
• Find out if you can get an exemption from Making Tax Digital for Income Tax - GOV.UK
• Choose the right software for Making Tax Digital for Income Tax - GOV.UK
• Sign up for Making Tax Digital for Income Tax - GOV.UK