Big Changes Ahead...

What Sole Traders Need to Know About Making Tax Digital in 2026

If you’re a sole trader, it’s time to switch it up —or rather, change to digital. From April 2026, Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) becomes mandatory for self-employed individuals, and it’s going to differ the way you manage your accounts.

At Adams Moore, we want to make sure you are kept in the loop of what’s going on, staying on top of new changes that affect you. This will ensure you’re ready to transition with minimal stress and maximum benefit.

What Is Making Tax Digital?

MTD is an HMRC initiative aimed at making the UK tax system more modern. To achieve this, it means that from now on businesses and individuals are required to keep digital records and submit updates to HMRC using compatible software.

The 2026 Changes: Who’s Affected?

Starting April 2026, sole traders and landlords that have annual business or a property income over £50,000 will be required to comply with MTD for ITSA.

If your combined gross income from self-employment and property is above £50,000, you’ll be required to:

Keep a digital record or records of income and expenses, on a software system alike Xero.
Submit quarterly updates to HMRC, not just year-end accounts.
Send a final declaration (End of Period Statement + Finalisation) by 31 January after the tax year to confirm the four quarters were correct.

Why This Isn’t All Bad News...

We can help and guide you through this process and submit the quarterly returns for you. This may be a great opportunity to stay on top of your income and expenses throughout the year. We can spot the issues early, and plan better for tax payments. This will perhaps allow more timely information, allowing better decisions to be made.

What You Should Do Now...

Check if you’ll be affected: Look at your latest tax return. Is your total self-employment/property income over £50,000? If so, please talk to your Partner.

Change can be daunting, but with the right preparation, MTD for ITSA is an opportunity to streamline your financial management and make your business sustainable for the future.

At Adams Moore, we’re helping sole traders make the switch as smoothly and painlessly as possible, or even it may be that time to go Limited.

Adams Moore – Total Support for You and Your Business.