A plasterer messaged me on Tuesday asking whether his Self Assessment was now illegal. He turns over about £28,000 a year, files in January, and a TikTok had told him he should have started filing quarterly on 6 April. He has not, and he is fine. He is not mandated until at least April 2028, possibly later. The MTD posts that are doing the rounds on social right now are, in roughly equal measure, scaremongering, out of date, or about somebody else’s tax band.
So this is the sole trader version of the post I wrote last week for landlords. Same framework, different income source. If you are self-employed in the UK and you want a straight answer to “am I in scope, and when,” start here. The mechanics of running MTD once you are in are covered in our broader piece, MTD for Income Tax: what UK sole traders and landlords need to do now; this post is about working out whether you are in the room at all.
The three thresholds, and the dates that go with them
MTD for Income Tax is being phased in by income band. The band you fall into decides your start date.
| Qualifying income | MTD for Income Tax start date |
|---|---|
| Over £50,000 | 6 April 2026 (already live) |
| £30,000 to £50,000 | 6 April 2027 |
| £20,000 to £30,000 | 6 April 2028 |
| Under £20,000 | No confirmed mandation date |
The official, current timetable lives in HMRC’s MTD for Income Tax collection ↗. If a forum post, a video or your mate down the pub contradicts those dates, treat them as wrong until you have checked the source.
What “qualifying income” means for a sole trader
This is where most self-employed people get it wrong. Qualifying income is your gross income, before any expenses, from self-employment plus property. Three points matter for trade income in particular.
It is turnover, not profit. A landscaper invoicing £42,000 a year with £18,000 of materials, fuel and tools has qualifying income of £42,000, not £24,000. Your van, your stock, your insurance and your subcontractor costs do not reduce the figure used to test the threshold, even though they reduce your taxable profit.
It is the combined total across all your trades. If you do two things, say plumbing during the day and DJing on Saturdays, you add the turnover. £28,000 of plumbing plus £6,000 of DJ work is £34,000 of qualifying income, which crosses the £30,000 line.
It is added to any rental income. If you turn over £30,000 as a sole trader and let a flat for £24,000, your qualifying income is £54,000. That puts you over £50,000 and in scope from April 2026, even though neither activity alone would have triggered it.
If you are not certain where you land, HMRC has a short eligibility tool at find out if and when you need to use MTD for Income Tax ↗. It takes about two minutes and is the authoritative answer for your situation.
Where sole traders sit on the timeline
A side hustle pulling in a few thousand a year is nowhere near scope and will not be for the foreseeable future. The cohort under real pressure right now is the established sole trader clearing £50,000, particularly tradespeople, consultants and freelancers who have been filing once a year and treating bookkeeping as a January problem.
What sole traders have to actually keep
Once you are in scope, the requirement is digital record keeping plus quarterly updates. For a trade, that means:
- Recording sales income digitally as it is invoiced or received, per business
- Recording allowable expenses digitally: materials, fuel, tools, subcontractors, software, insurance and so on
- Sending a quarterly summary to HMRC through compatible software
- Submitting a final declaration after the tax year, which replaces the self-employment pages of the old Self Assessment return
The full requirement is set out in HMRC’s guidance on using MTD for Income Tax ↗. An A4 cashbook you tot up once a year does not meet this standard on its own.
The detail that catches sole traders out: separate income sources
If you run more than one trade, or you have a trade plus a property letting, HMRC treats each as a separate income source inside your MTD return. You keep records separately and the quarterly update reflects each source.
This is the single most common reason sole traders pick the wrong software. A tool built around one tidy business may not cleanly handle a second trade or a property income source. Before you commit, check that the product on HMRC’s recognised software list ↗ supports multiple income sources in one return. Not all of them do.
If your accountant files for you
Plenty of sole traders never touch the software themselves; their accountant or bookkeeper handles it. That still works under MTD, but the sign-up route is different. Your accountant signs you up as their client through the agent process described in HMRC’s guidance on signing up a client for MTD for Income Tax ↗. Confirm now, not in July, that your accountant is set up for MTD for Income Tax, that they have the software they need, and that they have nominated themselves as your agent. Get the confirmation in writing.
A practical readiness path for sole traders
You do not need to panic, but you do need to know your date and prepare for it. Here is the order I suggest, whichever band you are in.
If you are over £50,000 (in scope now): you should already be keeping digital records from 6 April 2026. Your first quarterly update covers 6 April to 5 July 2026 and is due by 5 August 2026. If you have not started, the priority this month is choosing software, signing up through it, and entering income and expenses from 6 April onward. Backfilling six weeks of receipts is uncomfortable but doable; another six weeks of drift will hurt.
If you are £30,000 to £50,000 (April 2027): you have a year, and that is a gift. Use it to switch to digital record keeping voluntarily during the 2026-27 tax year, so that when mandation hits you are simply continuing a habit rather than starting one under a deadline. The plumbers and consultants I have moved across early have, without exception, said they wish they had done it sooner; the gain is not the tax filing, it is knowing every week what they have actually earned.
If you are £20,000 to £30,000 (April 2028): no immediate action is required, but the direction of travel is clear. Moving sales and expenses out of a notebook and into a monthly digital rhythm now will make the eventual transition a non-event.
The pattern I see again and again is that the software is rarely the hard part. The hard part is the underlying record keeping. If your trade lives in a folder of paper invoices, a bank account that doubles as a personal account, and a once-a-year reckoning with your accountant, MTD turns a private mess into a quarterly deadline. We wrote about that wider problem in signs your business has outgrown its software, and the move from spreadsheets to a proper system in from spreadsheet to software.
Frequently asked questions
Does MTD for Income Tax apply to a sole trader earning under £20,000?
No. There is currently no confirmed mandation date for qualifying income under £20,000. You continue with Self Assessment as normal unless and until HMRC announces a date and threshold that includes you.
Is the threshold based on turnover or profit?
Turnover, before expenses. Materials, fuel, subcontractors and tools do not reduce the figure used to test the threshold, even though they reduce your taxable profit.
I have two small side businesses. Do I add them together?
Yes. All of your self-employment turnover counts towards qualifying income, across every trade you run as a sole trader. Two small businesses at £18,000 each give you £36,000 of qualifying income, putting you in the £30,000 to £50,000 band.
Does VAT registration change anything?
No. VAT registration and MTD for Income Tax are separate regimes. You can be in MTD for VAT, MTD for Income Tax, both, or neither, depending on your turnover and income. The Income Tax test is your gross sole-trade and property income.
What if my income varies year to year?
HMRC assesses qualifying income based on your most recent finalised Self Assessment return. If a one-off contract pushes you over a threshold in a single year, check the eligibility tool, because the rules on which year is tested matter and are best confirmed against the source.
When is the first quarterly update due for an in-scope sole trader?
For sole traders mandated from 6 April 2026, the first quarterly update covers 6 April to 5 July 2026 and is due by 5 August 2026. A final declaration for the year follows by 31 January after the tax year ends.
Do I still need to file a Self Assessment?
The quarterly updates and final declaration replace the self-employment and property pages of Self Assessment for the income covered by MTD. You may still need a Self Assessment return for other reasons, such as savings income or capital gains.
Worth a conversation?
If MTD for Income Tax has made you look hard at how you actually track sales, expenses and customers, and the answer is “badly, across a notebook, a banking app and a year-end panic,” that is the kind of operational mess I help small businesses sort out. For most sole traders an off-the-shelf MTD product from the HMRC list is the right answer, and I will tell you so plainly. For traders running a more complex setup, multiple income sources, subcontractors, stock or project work, the underlying system is often the real fix; we covered the reporting side of that in custom database reports for UK small businesses.
Get in touch and tell me what your setup looks like. I will give you a straight answer on whether software off the shelf is enough or whether the layer underneath needs sorting first.