Making Tax Digital for Income Tax: what actually changes for sole traders in 2026

If you are self-employed in the UK and you earn over £50,000, the way you deal with HMRC changed in April 2026. Around 864,000 sole traders and landlords are in the first wave.

This is not a small admin tweak. It is the difference between thinking about tax once a year in January and thinking about it every three months, forever.

What the rules actually require

Three things.

Keep digital records. Your income and expenses have to be recorded digitally as you go. A shoebox of receipts and an evening in January is no longer compliant, even if the final numbers are right.

Send four updates a year. The deadlines are 7 August, 7 November, 7 February and 7 May, each following the end of the quarter it covers. These are summaries of income and expenses, not full returns, and they are not final. You can correct them later.

File a final declaration. At the end of the year you pull everything together, add anything outside your trade, and settle up. For the 2026/27 tax year that is due by 31 January 2028.

Your payment dates have not moved. 31 January and 31 July still do what they always did.

Who is caught, and when

The threshold is on qualifying income, which is your gross trading and property income before you take any expenses off. This catches people out. You can be well under £50,000 in actual profit and still be over the line.

• April 2026: over £50,000
• April 2027: over £30,000
• April 2028: over £20,000, as currently planned

If you are under the threshold this year, you are probably in the next wave or the one after. It is worth getting the habit now rather than scrambling later.

You need recognised software, and that is the catch

You can no longer type figures into the old HMRC online return. The updates have to come from software that is HMRC-recognised, meaning it has been tested against HMRC's systems and can talk to them.

Here is the thing worth understanding. Recognised is a plumbing test, not a quality rating. It says the software can submit correctly. It says nothing at all about whether the software is any good at working out what you are allowed to claim.

That distinction matters more than it sounds, because it splits the job in two.

The job splits in two

Filing is what MTD software does. It holds your digital records and pushes them to HMRC on time. There are plenty of decent options and some are free. Pick one that connects to your bank and get it done.

Finding is the other half, and nothing forces anyone to be good at it. A tool can be perfectly compliant, submit every update on time, and still let you pay more tax than you owe, because it faithfully files whatever you told it. If you never coded that software subscription as a business cost, it goes in as personal, and HMRC will happily accept the higher number.

Quarterly reporting makes this worse, not better. Four deadlines a year is four times the pressure to bulk-categorise a month of transactions quickly and move on. Speed is exactly how deductions get missed.

What people miss

The pattern is boringly consistent. It is rarely the big obvious costs. It is:

• Software and subscriptions charged to a personal card
• The business share of home utilities, phone and broadband, which is not the whole bill but is not nothing either
• Travel and accommodation for work that got filed under general spending
• Tools, equipment and one-off purchases bought in a hurry
• Professional fees, insurance and bank charges that never got coded

None of these are aggressive. They are ordinary allowable costs that simply never got labelled, because labelling 400 transactions is tedious and the deadline was yesterday.

What to do about it

Get compliant first. Choose an HMRC-recognised tool, connect your bank, and make the four deadlines. That part is not optional and it is not where you should be spending your thinking.

Then, separately, check the finding half. Once a year, before your final declaration, run your actual bank statement past something that reads each line against the deduction rules and tells you what is not claimed. It takes minutes and it is the only part of this process with money in it for you.

That is the gap Forensix sits in. It is not MTD filing software and we will not pretend it is. It reads your spending line by line, under UK and Spanish rules, and shows you what you are leaving on the table. You can scan a bank statement free without an account and see your own number in about ten seconds.

Being compliant and being efficient are two different problems. April 2026 solved neither one for you. It just made the first one compulsory.

General information, not tax advice. Thresholds, deadlines and penalties change, so confirm your own position on GOV.UK or with an accountant.