
How to Get Ready for Making Tax Digital (MTD) as a Sole Trader
- Emma
- Jun 25
- 2 min read
You may have heard about Making Tax Digital (MTD), but if you’re a sole trader, you might be wondering:
Do I need to worry about this yet? And what exactly do I need to do?
The good news is, there’s still time to prepare and the earlier you start, the easier it will be 😊.
Here’s what you need to know about MTD and how to get ready without the overwhelm.
What Is Making Tax Digital?
Making Tax Digital is HMRC’s plan to modernise the UK tax system by moving it fully online. It means keeping digital records and submitting updates to HMRC using compatible software.
MTD for VAT is already in place, and MTD for Income Tax will apply to many sole traders from April 2026.
Will It Apply to Me?
If you’re a sole trader or landlord with income over £50,000, you’ll be required to follow MTD rules from 6 April 2026.
If your income is between £30,000 and £50,000, MTD will apply from April 2027.
💡 Important: That’s total income not just profit.
What Will I Need to Do?
Instead of one Self Assessment return each year, you’ll need to:
Keep digital records of your income and expenses
Use MTD-compatible software (like Xero or QuickBooks)
Submit quarterly updates to HMRC
Submit a final declaration at year-end (similar to Self Assessment)
What Can I Do Now to Prepare?
1. Start using accounting software
If you’re still using spreadsheets or notebooks, now’s a great time to switch to digital bookkeeping. You don’t need to make the change overnight but starting early gives you time to learn and get confident.
2. Get your records organised
MTD requires good bookkeeping habits. That means:
Recording income and expenses promptly
Keeping receipts digitally (photos or scanned copies are fine)
Reconciling bank transactions regularly
3. Talk to your accountant
We can help you find the right software, set things up properly, and support you with the quarterly submissions when the time comes.
4. Don’t panic
There’s still time. The key is to start now, not later, so you’re comfortable with the process well before it becomes mandatory.
Final Thought
Making Tax Digital might sound like extra admin, but it’s really about getting your business records clearer, more up to date, and easier to manage.
At Barleyfields Accountancy, we’re already helping clients transition smoothly with no pressure and no jargon.
If you’d like help getting started or just want to talk through what MTD means for you, let’s chat.
Emma
Barleyfields Accountancy
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