Making Tax Digital: What UK Tradespeople Need to Know

What Is Making Tax Digital?

Making Tax Digital (MTD) is HMRC's programme to move the UK tax system online. The goal is for businesses and individuals to keep digital records and submit tax information to HMRC digitally — rather than filling in paper returns once a year.

MTD for VAT has been in place since 2019. MTD for Income Tax Self Assessment (MTD for ITSA) is the next big change, and it affects sole traders and landlords.

MTD for Income Tax: Key Dates

• April 2026 — Sole traders and landlords with income over £50,000 must comply
• April 2027 — Those with income over £30,000 must comply
• April 2028 — Those with income over £20,000 must comply (proposed)

If your self-employment income is above these thresholds, you'll need to:

1. Keep digital records of your income and expenses
2. Submit quarterly updates to HMRC (instead of one annual return)
3. Submit a final declaration at the end of the tax year

What Counts as a "Digital Record"?

HMRC requires you to record each transaction digitally — not just keep a spreadsheet total. This means:

• Each invoice you raise should be recorded with the date, amount, and customer
• Each expense should be recorded with the date, amount, and category
• Records must be kept in a compatible software or app

Paper records, Word documents, and basic spreadsheets won't be sufficient on their own.

What Do You Need to Do Now?

1. Start Keeping Digital Records

Even if MTD doesn't apply to you yet, getting into the habit now will save you a scramble later. Use software that records each invoice and expense individually.

2. Know Your Income Threshold

Add up all your self-employment income (not profit — income). If it's approaching £50,000, you need to prepare now.

3. Choose Compatible Software

HMRC maintains a list of MTD-compatible software. Look for tools that:

• Record income and expenses digitally
• Can submit quarterly updates to HMRC (or integrate with software that can)
• Are easy to use on a phone or tablet

4. Talk to Your Accountant

If you use an accountant, speak to them about MTD. They'll be able to advise on the best approach for your situation and may handle the quarterly submissions for you.

Does QuoteInvoice Help with MTD?

QuoteInvoice keeps a digital record of every quote and invoice you raise — with dates, amounts, customer details, and VAT. You can export all your records as a CSV at any time, which your accountant can use for MTD submissions.

While QuoteInvoice doesn't submit directly to HMRC (you'll need MTD-compatible accounting software for that), it gives you the clean, organised records that make the process straightforward.

The Bottom Line

MTD is coming for most tradespeople over the next few years. The best thing you can do is start keeping proper digital records now — so when the deadline arrives, you're already compliant.

QuoteInvoice helps you keep HMRC-ready records from day one. Try it free for 14 days.