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Making Tax Digital for Income Tax: What Every Manchester Sole Trader and Landlord Needs to Know

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Tax & HMRC 7 min read Published June 2026 CFA Accountants

If you're a sole trader or landlord in Manchester, there's a significant change coming to the way you report your income to HMRC — and the deadline is closer than most people realise. Making Tax Digital for Income Tax is the biggest shake-up to the UK's self-assessment system since it launched in 1997.

What actually is Making Tax Digital?

Making Tax Digital (MTD) is HMRC's programme to move the UK tax system away from paper records and annual filings towards digital record-keeping and more frequent online reporting. It began with VAT in 2019. The next phase — Making Tax Digital for Income Tax — applies to self-employed individuals and landlords.

Instead of submitting a single self-assessment tax return once a year, you'll be required to maintain digital records, submit quarterly updates, and complete a final declaration after the end of the tax year. Think of it less as a new tax and more as a new way of reporting the same information — just more regularly and through approved software.

Who is affected and when?

DateWho is affected
6 April 2026Sole traders and landlords with qualifying income over £50,000 (based on 2024/25 tax return)
6 April 2027Those with qualifying income over £30,000
6 April 2028Those with qualifying income over £20,000
Important: The threshold is based on gross income, not profit. Only self-employment and property income count — PAYE salary, dividends, savings interest and pension income do not count towards the threshold.

What changes in practice?

1. Digital record-keeping

You'll need to maintain digital records of your income and expenses using HMRC-compatible software. For many people this means moving away from spreadsheets and manual records.

2. Quarterly updates

Every three months you'll submit a summary of your income and expenses to HMRC. These are not full tax returns — just regular updates that give HMRC a picture of your income throughout the year.

3. Final declaration

At the end of the tax year you'll submit a final declaration to confirm your figures. This replaces the traditional self-assessment return while serving a similar overall purpose.

What software can be used?

To comply you'll need software that maintains digital records and communicates directly with HMRC. Popular options include Xero, QuickBooks and FreeAgent. At CFA Accountants, we help clients select, implement and manage suitable MTD-compliant software.

What do you need to do now?

  • Review your 2024/25 income and check whether your qualifying income exceeds the relevant threshold.
  • Consider moving to MTD-compatible accounting software if you haven't already.
  • Review your current bookkeeping processes and identify any gaps.
  • Sign up before your mandatory start date.
  • Speak to your accountant about how MTD will affect your reporting obligations.

Frequently Asked Questions

Does Making Tax Digital replace self-assessment?

Not entirely. MTD changes how income and expenses are reported during the year, but taxpayers will still need to submit a final declaration after the tax year ends.

Can I use spreadsheets for MTD?

Spreadsheets alone are generally not enough unless connected to HMRC through compatible bridging software. Most taxpayers will find dedicated accounting software easier.

What happens if I miss a quarterly submission?

HMRC's penalty points system applies to late submissions. Repeated failures may lead to financial penalties.

MTD Support from CFA Accountants

We support sole traders, landlords and self-employed individuals across Manchester, Salford, Trafford, Stockport and Greater Manchester. Whether you're already using cloud accounting software or still managing records manually, we can help you prepare for Making Tax Digital.

This article is for general information purposes only. Tax legislation and HMRC guidance can change. Professional advice should always be sought before making financial or tax decisions.