Making Tax Digital for Income Tax – get ready now to save stress later

If you’re a plumber, electrician, builder or any kind of self-employed tradesperson, you’ve probably heard the phrase ‘Making Tax Digital for Income Tax’ floating around and maybe quietly hoped it would just… go away.

Bad news: it’s not going away.

Good news: it’s a lot simpler than it sounds, especially if you use the right tools.

Let’s break it down, jargon-free.

What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) for Income Tax is HMRC’s plan to modernise how self-employed people and landlords report their earnings.

Instead of:

• keeping paper records or spreadsheets
• filing one self-assessment tax return a year

You’ll:

• keep digital records of income and expenses
• send quarterly updates to HMRC using MTD-compatible software
• submit a MTD tax return at the end of the tax year.

The aim? Fewer mistakes, no last-minute scrambles and a clearer picture of your tax as you go.

Who does Making Tax Digital for Income Tax apply to?

It’s being rolled out in phases and will affect:

• sole traders and self-employed individuals
• landlords.

The roll-out is based on your annual business or property income:

• £50,000+ income: from April 2026
• £30,000+ income: from April 2027
• £20,000+ income: from April 2028

If your income is below £20,000, MTD for Income Tax doesn’t currently apply. However, it’s a good idea to start keeping digital records now so you’re prepared for future reporting requirements.

What does MTD mean for tradespeople?

In real-life terms, MTD means:

• snapping photos of receipts instead of stuffing them in the van
• logging jobs, materials and mileage digitally
• sending HMRC a summary of your income and expenses every three months (not a full tax return)
• knowing roughly what tax you’ll owe before the deadline hits.

Quarterly updates don’t mean filing four tax returns a year; they’re just check-ins.

You’ll still pay your tax bill and file an end-of-year MTD tax return the usual way.

Do I need special software?

Short answer: yes.

HMRC won’t accept quarterly updates through spreadsheets alone or through the old self-assessment system.

You’ll need MTD-compatible software that can:

• record income and expenses digitally
• submit updates directly to HMRC.

Why sorting this now will save you stress later

Even if MTD feels a while off, getting set up early means:

• no panic when the rules kick in
• cleaner records (and fewer missed expenses)
• less time on admin, more time on the tools
• no nasty tax surprises.

MTD is about replacing one big stressful job a year with smaller, simpler steps.

The takeaway

Making Tax Digital might sound intimidating, but for tradespeople it boils down to this: keep records digitally, send updates quarterly and use MTD software that does the hard work for you.

Once it’s set up, it runs quietly in the background, leaving you to focus on your work, not your paperwork.

If you want to get ahead of MTD without overcomplicating things, now’s the perfect time to start.

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