With Making Tax Digital for Income Tax starting on 6 April 2026, many sole traders and landlords still appear unclear on what the changes actually involve. HMRC says individuals with qualifying income over £50,000 from self-employment, property, or both, must from that date keep digital records, use compatible software, and submit quarterly updates, while still completing an end-of-year submission. Research highlighted this week by Property Industry Eye, based on Taxfix data, suggests awareness is still lacking just days before launch. In a survey of 1,000 sole traders earning more than £50,000, only 39% understood they must keep digital records from 6 April, and only around a third knew they must use HMRC-recognised software. The same report found that 36% wrongly believed annual tax returns would disappear, 24%thought they would need to pay tax quarterly, and 22% expected the new system to increase their tax bill.
The concern is not just confusion, but the effect it may have on confidence and productivity. Taxfix’s findings suggest 28% of respondents expect to be more cautious about taking on extra work, 27% think they will spend more time on tax administration, and 23% are even considering returning to full-time employment because of the change. While HMRC has confirmed that penalty points for late quarterly updates will not be applied in the first year for those mandated into MTD, businesses and landlords still need to be prepared because the new reporting framework is now here. For landlords with qualifying income above the threshold, this is a reminder to check whether they fall within scope, choose suitable software, and make sure their records are fully digital before the new regime begins.
