MTD for Income Tax hits on 6 April 2026. That's 14 days away.
If you're a sole trader earning over £50k, you need to be using MTD-compatible software from day one. HMRC won't accept the old annual return anymore.
Here's what "ready" actually means:
The minimum viable MTD setup
1. Compatible software
You need something that submits quarterly updates directly to HMRC. FreeAgent, QuickBooks, Xero — all work. Spreadsheets with a bridging tool also work (but it's faff).
2. Your digital records in one place
Every income payment, every business expense. From April onwards you'll be submitting these quarterly, so if your records are a mess, fix that now.
3. Your UTR and Government Gateway login
You'll need both to register for MTD. If you've lost your UTR, HMRC takes 10+ working days to issue a replacement. Sort it this week.
4. Bank feeds connected
Manual entry is a nightmare. Connect your business account to your software now — takes 10 minutes.
The things that catch people out
- Personal bank account — if you've been mixing personal and business expenses, you'll need to split them before April
- Cash income — still needs logging. No exceptions.
- Property income — different MTD rules. Don't assume the same software covers everything.
- Side income — if it's over the threshold, it's all in scope
What happens if you ignore it
HMRC's penalty system for MTD non-compliance is points-based. Miss a quarterly submission = 1 point. Hit 4 points = £200 fine. Then it escalates.
There's no grace period for "I didn't know." The communications have been going out for months.
If you want the full checklist — software comparison, registration steps, what to do if your records are a mess — I put together an MTD Readiness Toolkit with everything in one place. £14, covers the full transition for sole traders and CIS contractors.
Or just start with the free MTD cost calculator to figure out which software is cheapest for your situation.
14 days. Don't leave it to day 13.
Top comments (0)