23 May Making Tax Digital for Income Tax: What Sole Traders and Landlords in Croydon, Bromley and Kent Must Do
From 6 April 2026, if your total self-employment and property income is above £50,000, you must keep digital records, use compatible software, and send quarterly updates to the HMRC. Eligibility is based on gross qualifying income, not profit.
At CTMP, we help clients move from an annual tax return thinking mindset to a quarterly routine: with bank feeds, clean categories, reconciled records and fewer surprises. Our Croydon-based team has over four decades of experience, and our accounting and software support is built around practical systems.
Need help getting MTD-ready?
If you are unsure whether the rules apply to you, call 0208 776 0200. A short conversation can confirm which income sources count, what software you need and whether your bookkeeping is ready for quarterly reporting. You can also email info@ctmp.co.uk.
Who must use Making Tax Digital for Income Tax from April 2026?
MTD for income tax rules now apply in phases. The first group is sole traders and landlords with qualifying income over £50,000. The next groups follow in 2027 and 2028 The next groups join the regime from April 2027 and April 2028. If you have multiple income sources, look at the combined total.
| Qualifying income from self-employment and property | Mandatory start date |
| Over £50,000 | 6 April 2026 |
| Over £30,000 | 6 April 2027 |
| Over £20,000 | 6 April 2028 |
What counts towards qualifying income?
Qualifying income is total income from self-employment and property. Employment income, dividends, pensions and an individual partner’s share of partnership profit do not count towards that threshold, although they may still need to be reported in your tax return.
How do sole traders and landlords work out qualifying income?
MTD for Income Tax can catch people who think profit is the test. HMRC assesses gross income before expenses. If you receive £27,000 from a trade and £25,000 from rental income, the total is £52,000, so the first phase can apply.
For Making Tax Digital for landlords, the practical risk is mixed records. Mortgage interest, repairs, insurance, service charges and agent fees may be recorded differently across properties. For sole traders, the risk is delayed categorisation: materials, mileage, subcontractor costs and card payments build up quickly. If both income streams exist, review them together.
Croydon and Bromley clients often want one answer to a simple question: “Do I have to sign up now?” The answer starts with the last submitted Self Assessment return, but it should not end there. If your 2025 to 2026 income has moved above the next threshold, planning early avoids a rushed software change later.
For landlords with growing portfolios, your property tax support should cover the records behind the return, not only the return itself.
MTD for Income Tax is a filing and record-keeping change. The taxpayers who prepare early will have cleaner data, faster answers and fewer year-end surprises.
What records and compatible software will you need for MTD quarterly updates?
MTD quarterly updates are summaries of income and expenses sent through compatible software. They are not extra tax returns, but they do require digital records that support the final tax return.
Your software should be able to:
- Keep digital records for each relevant income source.
- Send quarterly updates to HMRC.
- Support your final tax return by the 31 January deadline.
- Work with your accounting period and VAT position.
- Connect with spreadsheets through bridging software where that is still right.
A landlord with two properties and few transactions may need a different setup from a busy electrician handling deposits, materials, van costs and subcontractors. Our accounting services for tradesmen often starts with workflow: how income arrives, how receipts are captured and who checks the figures before submission.
What should sole traders and landlords do now?
Do these steps before the next: reporting deadline approaches.
- Check your qualifying income from self-employment and property.
- Confirm whether you fall into the 2026, 2027, or 2028 phase.
- Decide who will sign you up: you or your agent.
- Choose software before signing up, not after.
- Separate personal and business transactions where possible.
- Reconcile records monthly, even though updates are quarterly.
- Keep evidence for repairs, mileage and mixed-use costs.
- Review your final tax position before 31 January.
For Making Tax Digital for sole traders, the biggest practical issue is usually habit. Someone who invoices quickly but records expenses once a quarter will struggle less than someone who leaves everything until January. That is why we prefer a monthly check-in rhythm for clients close to the threshold.
Local support also matters when records are messy. Our chartered accountants in Bromley work with clients who need clear steps, not abstract tax language.
How can CTMP help with MTD for Income Tax?
CTMP is a Croydon-based firm of chartered accountants serving London, Bromley, Surrey, Kent and beyond. We provide accounting software advice and training, bookkeeping, management accounts, personal and property tax services, HMRC correspondence and tax planning. We are registered to carry out audit work in the UK by the Institute of Chartered Accountants in England and Wales.
Our role involves checking whether MTD applies, matching the software to your income sources, creating a clean bookkeeping routine, and reviewing figures before they become a tax problem. It also means being honest when a simple setup is enough.
For clients across the county, our accountants in Kent focus on practical compliance: clear records, agreed deadlines and tax decisions made before the pressure arrives.
Build the routine before HMRC chases it
Making Tax Digital for Income Tax rewards steady record-keeping. It could be harmful to the company if there are delays, confusion, and systems that only work when one person remembers every detail.
The good news is that the work can be made routine. Once income sources are confirmed, software is authorised and records are checked regularly, MTD becomes part of the monthly accounts process.
If you are a sole trader, landlord, or both, the right time to review your position is now. Call CTMP on 0208 776 0200 or email info@ctmp.co.uk for practical support with MTD, bookkeeping, software, and tax reporting.
Frequently asked questions
Does MTD for Income Tax apply to profit or income?
It applies to qualifying income, which means gross income from self-employment and property before expenses. Profit is not the threshold test.
When is the first MTD phase?
The first mandatory phase started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000.
Do quarterly updates replace my tax return?
No. You still submit a tax return and pay any tax due by 31 January following the tax year.
Can I keep using spreadsheets?
You can keep spreadsheet records if compatible bridging software connects them to HMRC and meets the MTD requirements.
What should I do if I have both rental and trading income?
Add both income sources together when checking your qualifying income. If the combined gross total crosses the threshold, MTD may apply.