MTD starts in April. UK sole traders: here is the 10-minute audit you need to do this weekend

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Making Tax Digital for Income Tax is no longer a future problem.

April 2026 is weeks away. If you are a UK sole trader earning over £50,000 — or over £30,000 from April 2027 — this affects you directly.

Most people I speak to are either:

Completely unaware it is happening
Aware but vaguely hoping it will sort itself out

It will not sort itself out.

What MTD actually requires

From April 2026, qualifying sole traders must:

Keep digital records (spreadsheets count, but only with bridging software)
Submit quarterly updates to HMRC via MTD-compatible software
Submit a final declaration at year end

That is four extra submissions per year, plus a fifth. Every year. Forever (probably).

The penalty points system most people miss

HMRC is switching from flat fines to a penalty points system for late submissions.

Each late submission = 1 point
4 points = £200 fine
Points reset only after a clean compliance period

This is more punishing than the old system for serial late filers. Miss a quarterly submission, you are already a quarter of the way to a fine.

The 10-minute audit (do this now)

Grab a coffee. Answer these:

1. Are you using MTD-compatible software?
QuickBooks, FreeAgent, Xero, Sage — most main options are ready. Old Excel sheets need bridging software (Absolute Bridging, etc.).

2. Are your records digital?
Receipts in a shoebox = not compliant. You need digital records of every transaction.

3. Do you know your threshold?
Check your 2024/25 self-assessment return. £50k+ from sole trade = April 2026. £30k+ = April 2027.

4. Have you registered?
You need to sign up through HMRC or your software provider. This is not automatic.

Free resource

I built a free MTD Readiness Checker that walks through these questions and tells you exactly what you still need to do.

If you want the full package — HMRC registration guide, quarterly submission checklist, compatible software comparison, and penalty calculator — the MTD Compliance Toolkit is £9.

Not a sales pitch. Most people genuinely need a checklist and a clear explanation of what software to buy. The free tool covers the audit; the paid one covers the setup.