Making Tax Digital for Income Tax: what sole traders need to know
Making Tax Digital (MTD) for Income Tax means keeping digital records and sending HMRC quarterly updates with compatible software. It started on 6 April 2026 for the highest earners and widens in 2027 and 2028.
Checked against GOV.UK on 23 October 2026. General information for sole traders in England, Wales and Northern Ireland, not tax advice. Scottish Income Tax rates are different.
Who needs it, and when
GOV.UK says sole traders and landlords registered for Self Assessment need to use MTD for Income Tax if their qualifying income is over the threshold:
| Qualifying income over | In tax year | Use MTD from |
|---|---|---|
| £50,000 | 2024/25 | 6 April 2026 |
| £30,000 | 2025/26 | 6 April 2027 |
| £20,000 | 2026/27 | 6 April 2028 |
Qualifying income is gross self-employment and property income before expenses, not profit. Some people are exempt; GOV.UK has a checker.
What it means for CIS subbies
A subbie on £165 a day, 5 days a week for 46 weeks, invoices about £37,950. If that's your 2025/26 turnover, you'd be over £30,000 and need MTD from 6 April 2027. Use gross income before CIS deductions.
What changes
- Keep digital records of income and expenses in MTD-compatible software.
- Send HMRC a quarterly update.
- Finalise the year by 31 January after it ends.
Where BillMyWeek fits
BillMyWeek is invoicing software, not MTD software: it doesn't send quarterly updates to HMRC. The Pro tax year summary organises your invoices by UK tax year and exports to Excel, which you can bring into MTD software or give to your accountant. To estimate your current bill, use the January tax bill calculator. See also the records checklist.
This guide is part of our Self Assessment guides for the self-employed.
Free: The UK Contractor's Cheat Sheet 2026/27
CIS rates, overtime maths, tax dates, mileage, VAT and late payment, on 2 pages. Keep it on your phone or print it for the van.
Frequently asked questions
When does Making Tax Digital for Income Tax start?
6 April 2026 for qualifying income over £50,000, 6 April 2027 for over £30,000, and 6 April 2028 for over £20,000.
Is qualifying income my profit?
No. It's gross self-employment and property income, before expenses.
Does BillMyWeek submit MTD updates?
No. BillMyWeek is invoicing software and doesn't file with HMRC.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax – GOV.UK
- Business records if you're self-employed – GOV.UK
This guide is general information, not legal, tax or financial advice. Rules and rates change, so check the linked GOV.UK pages for the current position.