Making Tax Digital for Income Tax: the April 2026 checklist for sole traders and landlords


Making Tax Digital for Income Tax Self Assessment starts on 6 April 2026. From that date, sole traders and landlords with qualifying income over 50,000 pounds will need to keep digital records and send quarterly updates to HMRC. It is the biggest change to Self Assessment in a generation, and the firms that prepare early will find it far easier than those who leave it to March.

This checklist explains who is in scope, what changes, and the five steps to take now.

Who is in scope

From 6 April 2026, the rules apply to sole traders and landlords whose total qualifying income is over 50,000 pounds a year. Qualifying income means gross income from self-employment and property combined, before expenses. If you have 30,000 pounds of self-employment income and 25,000 pounds of rental income, your qualifying income is 55,000 pounds, and you are in scope.

The threshold drops to 30,000 pounds from April 2027, so many more people will join in the second year. Partnerships and more complex cases follow later, and HMRC has confirmed the timetable in stages. If you are close to either threshold, plan as though you are in scope. Income can rise, and a good year can push you over the line with little warning.

What actually changes

Three things change. First, records must be kept digitally, in compatible software, from the start of the tax year. Second, you must send HMRC a quarterly update of income and expenses, within one month of the end of each quarter. Third, after the tax year ends, you complete an End of Period Statement and a Final Declaration, which together replace the Self Assessment tax return for this income.

The annual tax return does not simply move online. The work becomes a year-round routine, with four deadlines instead of one. That is the real shift, and it is why preparation matters more than software choice alone.

Step 1: Check your qualifying income

Work out your gross self-employment and property income for 2024-25, and estimate it for 2025-26. Use gross income, not profit. If either year is over 50,000 pounds, you are in scope from April 2026. If you are between 30,000 and 50,000 pounds, you join from April 2027, but starting the digital habit now costs little and saves a rushed transition later.

Step 2: Choose compatible software

You need software that can keep digital records and send quarterly updates to HMRC. Spreadsheets alone do not qualify unless they are linked to bridging software that can send the updates. Check that your current bookkeeping software is on HMRC's list of compatible products, and if it is not, plan the move now rather than during your first quarter.

If you work with an accountant, ask which software they use and whether your records will flow into it without rekeying. A system that needs manual re-entry every quarter will cost you time four times a year.

Step 3: Set up clean digital records

Start keeping digital records now, even before April 2026. Separate business income and expenses from personal spending, record transactions as they happen, and keep digital copies of invoices and receipts. The first quarterly update is far easier when the records are already digital and tidy.

Pay special attention to property income and expenses, which are often the messiest part of a landlord's records. Rent received, agent fees, repairs, mortgage interest and insurance should each have their own category, so the quarterly figures are easy to check before they are sent.

Step 4: Build a quarterly rhythm

Mark the four quarter ends in your diary now, with a reminder one week before each deadline. The updates are due within a month of the quarter end, but aim to finish within two weeks, while the quarter is still fresh in your mind.

A simple routine works: reconcile the bank, check the categories, review any unusual items, then send. If you use an outsourced bookkeeping team, agree the rhythm with them in advance, including who prepares the update, who reviews it, and how quickly queries are answered.

Step 5: Talk to your accountant early

Do not wait until your first quarterly update is due to involve your accountant. Ask now whether your income is in scope, whether your software is compatible, and what your quarterly process will look like. Accountants are preparing hundreds of clients for the same deadline, and the ones who start early get the calmest transition.

If you run a practice, the same logic applies at scale. The firms that will cope best are those that have already moved clients onto compatible software, agreed quarterly workflows, and priced the extra touchpoints. That work is far cheaper in November than in April.

Common mistakes to avoid

The most common mistake is leaving everything until March 2026, when software providers and accountants are at their busiest. The second is assuming a spreadsheet is enough, without the bridging software that sends updates to HMRC. The third is forgetting that property and self-employment income are added together, so a landlord with a small side business can be in scope without realising it.

A fourth mistake is treating the quarterly update as a mini tax return. It is a summary of income and expenses, not a full calculation, and over-checking it every quarter wastes the time the new system is meant to save.

How Finex Outsourcing can help

Making Tax Digital turns tax compliance into a year-round job, and that is exactly the kind of steady, repeatable work an outsourced team handles well. Finex Outsourcing provides tax compliance services for UK businesses and accountancy firms, including digital record keeping, quarterly update preparation, VAT work and year-end processing, so your team can focus on advice while the routine work is done accurately and on time.

If you want to prepare for April 2026 without adding headcount, talk to us about our tax compliance services. We work inside your existing systems, follow your review structure, and keep your records ready for every quarterly deadline.

Learn more about our tax compliance services at https://finexoutsourcing.com/tax-compliance/, or visit https://finexoutsourcing.com/ to see how we support UK firms.

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