Making Tax Digital:
What You Need to Do
Right Now

You're a plumber. An electrician. A joiner. You've got a full week of jobs, a van that needs servicing, and a customer who still hasn't replied about that quote. The last thing you wanted this April was HMRC changing how you do your tax.

But here we are. Making Tax Digital for Income Tax — MTD ITSA — went live on 6 April 2026. If your gross self-employment income is over £50,000 a year, it applies to you right now. Between £30,000 and £50,000? April 2027 is your date. Over £20,000? April 2028.

This isn't a guide written by accountants for accountants. It's a plain-English walkthrough of what Making Tax Digital actually means for a self-employed tradesperson, what you have to do, what software makes sense, and how going digital with your records doesn't have to become another full-time job.

What Is Making Tax Digital — and Does It Apply to Me?

MTD for Income Tax replaces the traditional annual Self Assessment tax return for sole traders and landlords above certain income thresholds. Instead of one big return in January, you'll now submit four quarterly updates to HMRC throughout the year — a summary of your income and expenses for each quarter — plus a Final Declaration at the end of the tax year.

You also need to keep digital records of your business income and expenses using HMRC-approved software. Paper records and manual spreadsheets alone no longer cut it.

The thresholds are based on your gross self-employment income — that's your total turnover before expenses, not your profit. If you're unsure where you sit, your accountant or last Self Assessment return will tell you.

The Key Dates You Need to Know

Making Tax Digital rolls out in phases. Here's where things stand:

One bit of good news: HMRC has confirmed there will be no late-submission penalties for quarterly updates during the first year (2026/27) for those in the first wave. That doesn't mean you should ignore it — it means now is the right time to get set up without the pressure of immediate fines hanging over you.

What Do You Actually Have to Do?

Stripped back, Making Tax Digital for Income Tax requires three things:

1. Keep digital records of all your business income and expenses throughout the year — in approved software, not a shoebox or a spreadsheet.
2. Submit four quarterly updates to HMRC — a summary of income and expenses for each quarter. These aren't full tax returns; they're short summaries.
3. File a Final Declaration after the end of the tax year, replacing what was previously the annual Self Assessment return. This is where your accountant earns their keep.

The quarterly deadlines follow the tax year quarters:

• Quarter 1 (6 April – 5 July): submit by 5 August
• Quarter 2 (6 July – 5 October): submit by 5 November
• Quarter 3 (6 October – 5 January): submit by 5 February
• Quarter 4 (6 January – 5 April): submit by 5 May
• Final Declaration: by 31 January following the end of the tax year

Most tradespeople will handle this through their accountant or bookkeeper once their records are kept properly in the right software. The quarterly submissions are simple if your records are up to date — it's the record-keeping habit that trips people up.

What Counts as Digital Records?

Digital records means keeping a log of your business income and expenses in HMRC-compatible software. Every invoice you raise, every payment you receive, every bag of materials, every tank of diesel — it all goes in. Not in a notebook. Not on a spreadsheet. In the software.

The good news is that modern apps approved for Making Tax Digital make this genuinely quick. Most have a receipt scanner in the phone app — photograph a receipt on site and it's logged. If you raise invoices through software (more on that below), your income is already captured automatically.

Which Software Should You Use?

There's no shortage of Making Tax Digital-compatible accounting software. The main options worth knowing about for a self-employed tradesperson:

All four are on HMRC's list of recognised Making Tax Digital software. If you're unsure, ask your accountant which one they prefer — most work in Xero or QuickBooks, and using the same platform makes the quarterly submissions and Final Declaration much smoother.

One thing we don't do at Get A Trades Website is handle your Making Tax Digital filings or act as your accountant. But we do have accounting integrations in the pipeline — so that your invoicing data flows directly into your accounting software without double-entry. More on that below.

Start with Your Invoices — Everything Else Follows

The simplest way to approach Making Tax Digital is to start at the beginning of the money chain: your invoices. If every invoice you raise is created digitally, in software, you've already captured the most important part of your income records automatically. You're not chasing paperwork — it's just there.

This is exactly what we've built the Get A Trades Website portal to help with. The portal includes a clean invoicing tool — raise professional invoices from your phone, send them directly to customers, and keep a clear record of what's been paid and what's outstanding. No faff, no spreadsheet, no trying to remember what that cash job was in February.

It won't submit your quarterly Making Tax Digital returns for you — that's what your accounting software and accountant are for. But it gives you the solid foundation: clean digital records of what you've invoiced, in a format that's easy to export or connect to your accounting software. We're working on direct integrations with the major Making Tax Digital platforms so that data flows across automatically — watch this space.

Going digital with your invoicing is the single best first step you can take right now, regardless of your Making Tax Digital threshold or timeline. It makes your quarterly summaries straightforward, your accountant's job easier, and your own records actually useful when you need them — for a mortgage application, a tender, or just knowing where you stand at the end of the month.

Going Digital Is a One-Time Adjustment, Not a Permanent Headache

A lot of tradespeople hear "digital records" and assume it means hours of admin. It doesn't — once you've got a system in place. The first few weeks of using any new software have a learning curve. After that, it becomes habit.

Think about it this way: the trades businesses that already invoice digitally, record expenses as they happen, and know their numbers at a glance are in a much stronger position — not just for HMRC, but for running their business well. They know which jobs are profitable. They know when cash is tight. They can make decisions based on actual numbers, not a rough guess.

Making Tax Digital is HMRC forcing the issue. But the underlying habit — keeping clean digital records — is one worth having regardless. The tradespeople who embrace it will find it becomes genuinely useful. The ones who fight it will just find it stressful.

We write a lot about how a strong local SEO presence and good systems work together for a trades business. Making Tax Digital is another piece of that same picture: the more of your business that runs cleanly through proper digital tools — including a website that works for you around the clock — the easier everything else becomes.

Common Questions About Making Tax Digital for Tradespeople

Does Making Tax Digital apply to me as a self-employed tradesperson?

If your gross self-employment income exceeds £50,000 per year, Making Tax Digital for Income Tax applies to you from April 2026. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. If you're below £20,000, HMRC has not yet confirmed a mandatory date — but getting set up early is still a good idea.

What counts as 'digital records' under Making Tax Digital?

Digital records means keeping a log of all your business income and expenses in software that HMRC recognises as Making Tax Digital-compatible. That includes invoices raised, payments received, materials bought, fuel, tools, and any other business costs. A spreadsheet alone no longer qualifies — you need approved software.

Will I still need an accountant under Making Tax Digital?

Most self-employed tradespeople will benefit from keeping an accountant, at least for the Final Declaration at the end of the year. The quarterly submissions are straightforward summaries, but the end-of-year filing is where an accountant earns their keep — particularly if you have allowances, capital items, or any complexity in your affairs.

Is there a penalty if I don't comply with Making Tax Digital?

HMRC has confirmed there will be no late-submission penalties for quarterly updates during the first year (2026/27) for those mandated from April 2026. After that, a points-based penalty system kicks in. The sensible approach is to get set up now while the pressure is off, rather than scrambling later.

What's the best Making Tax Digital software for a sole trader tradesperson?

For most self-employed tradespeople, FreeAgent (free with NatWest, RBS, or Mettle business banking) or QuickBooks Sole Trader (around £10/month) are the most practical starting points. Both are Making Tax Digital-compliant, mobile-friendly, and straightforward to use without an accounting background. Xero is a solid option if you plan to grow a team or want more reporting depth. Ask your accountant what they use — it's much easier when you're both in the same system.

If you want to get your business better set up digitally — invoicing, records, and a website that actually brings in enquiries — get in touch with Gary and we'll have a straightforward conversation about what makes sense for you. No jargon, no hard sell.