The 2026 MTD Warning: What Sole Traders and Landlords Need to Know

HMRC has recently issued a fresh warning to over 800,000 sole traders and landlords: the deadline for Making Tax Digital (MTD) for Income Tax is approaching.

From 6 April 2026, the way you report your income is changing. This isn't just a small administrative tweak; it is the most significant overhaul of the UK tax system in three decades. If your qualifying income from self-employment or property exceeds £50,000, these rules will apply to you first.

What is Changing?

Under the new regime, the "once-a-year" scramble to find receipts will become a thing of the past. Instead, you will be required to:

• Keep Digital Records: All income and expenses must be recorded using HMRC-recognised software.
• Send Quarterly Updates: Every three months, you must submit a summary of your business finances to HMRC via your software.

The "Five Submission" Year

A common misconception is that quarterly updates replace the annual tax return. In reality, you will now be making five main submissions each year:

1. Four Quarterly Updates: Summaries of your day-to-day income and expenses.
2. One Final Declaration: Due by the following 31 January to "bridge the gap" and finalise your tax position.

What the Quarterly Updates Don't Cover

While your software will automatically pull through your basic income and rental figures for the year, it won't capture everything. The quarterly updates are "light-touch" summaries and typically do not include:

• Capital allowances claims
• Pension contributions
• Dividends or interest
• Employment salary (PAYE)

These additional items must still be reported in your Final Declaration at the end of the year to ensure your tax bill is calculated correctly.

How Harris & Co Can Support You

Moving to a quarterly reporting cycle can feel like a heavy administrative burden, but it is also an opportunity to gain better visibility into your cash flow and tax liabilities throughout the year.

At Harris & Co, we are helping our clients transition to MTD-compatible software now, so the process is seamless by the time 2026 arrives. Whether you need help choosing the right software or want us to handle the quarterly submissions on your behalf, we are here to ensure you stay compliant without the stress.