Tax news · June 2026
From 6 April 2026, many sole traders and landlords must keep digital records and report to HMRC every quarter. Here is what is changing, who it affects, and our view.
The biggest change to the tax system in years has now begun. From 6 April 2026, Making Tax Digital for Income Tax started for the first group of sole traders and landlords, replacing the once a year tax return with quarterly digital reporting. If you run a business or let property, this affects how you keep your records and how often you deal with HMRC, so it is worth understanding clearly.
Under Making Tax Digital for Income Tax, affected people can no longer simply file one self assessment return after the year ends. Instead you must keep your records digitally in compatible software, send HMRC a summary of your income and expenses every three months, and then submit a final declaration after the year end to confirm the figures and any other income. In effect, one annual return becomes five submissions a year. The first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026.
For now, the rules apply to sole traders and landlords whose combined gross income from self employment and property was over 50,000 pounds, based on the 2024 to 2025 tax year. The threshold then falls to 30,000 pounds from April 2027 and to 20,000 pounds from April 2028, so many more people will be drawn in over the next few years. It does not apply to income earned inside a limited company, and it does not apply to employees taxed under PAYE who have no business or property income.
The first step is to check whether your income puts you in scope, because it is based on gross income, not profit, which catches people out. If you are in, you need compatible software and you need to be keeping your records digitally rather than on paper or in a basic spreadsheet on its own. Then it is a matter of getting into the rhythm of the quarterly updates and not missing the deadlines, which now carry penalties under a points based system. If you are close to a threshold, it is far better to know now than to be caught unprepared when it drops.
Honestly, this is a significant increase in admin for many small businesses and landlords, and for the smallest it is hard to see a real benefit to them from reporting four times as often. That said, it is happening, and resisting it is not an option. Our view is that the people who get ahead of it will barely notice it, because good cloud software does most of the work automatically once your bank feeds and records are set up, while those who leave it to the last minute will find it stressful. We would rather get clients onto simple software now, well before their threshold year, so the change becomes a quiet routine rather than a scramble. If you are a landlord with income near 30,000 or 20,000 pounds, this is the moment to start preparing, not 2027 or 2028.
We check whether you are in scope, set you up on compatible software, get your bookkeeping into shape, and can handle the quarterly updates and the final declaration for you so the deadlines are never a worry. For many clients we simply take the whole thing on, and they carry on running their business as normal.
You do if your gross income from self employment and property was over 50,000 pounds in 2024 to 2025. The threshold falls to 30,000 pounds in April 2027 and 20,000 pounds in April 2028. It does not apply to company income or to employees with no business or property income.
The first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026, with further updates each quarter and a final declaration after the year end.
We will check if you are in scope, set up your software and handle the quarterly reporting for you. Book a free call back and make it a non event.