With under a year to go until the government’s Making Tax Digital (MTD) scheme goes live, sole traders can now sign up to trial the system. Starting on 6 April 2026, it’s hoped the new initiative will drive economic growth, as well as saving time for taxpayers earning more than £50,000.
As part of the Government’s Plan for Change mission, eligible taxpayers are being encouraged to sign up to a testing programme now to get ahead of the upcoming changes.
Sole traders are advised that the upcoming changes will mark a time-saving change in how they will need to keep digital records and report their income to HM Revenue and Customs (HMRC).
By keeping digital records, sole traders - and landlords - can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities.
Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush, the Government says.
Eligible customers can now sign up to the testing programme here.
James Murray MP, Exchequer Secretary to the Treasury, said: “MTD for income tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.
“By modernising how people manage their tax, we’re helping businesses work more efficiently and productively while ensuring everyone pays their fair share. This is a crucial step in this government’s decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.
Craig Ogilvie, HMRC’s director of MTD, added: “This is the most significant change to the self-assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax.
“By signing up to our testing programme now, people will be able to familiarise themselves with the new process and access dedicated support from our customer support team before it becomes compulsory next year.”
From April 2026, individuals with qualifying income above £50,000 will need to keep digital records, use MTD-compatible software and submit quarterly summaries of their income and expenses to HMRC.
These digital requirements will help businesses save time through more efficient record-keeping, reduce errors in tax calculations, and provide a clearer picture of their tax obligations throughout the year.
The phased introduction of MTD for Income Tax follows the successful implementation of the VAT equivalent, which now helps more than two million businesses reduce errors and save time on their tax affairs. Businesses which joined the VAT testing phase were better prepared for the move to quarterly reporting.
Penalties for late quarterly updates will not apply during the testing phase, providing an ideal opportunity to get used to the new process without risk. Around 780,000 self-employed individuals and landlords will be required to use MTD for Income Tax from April 2026, with a further 970,000 joining from April 2027.
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