If you’re self-employed or a landlord in the UK, a major change is coming to how you report your income to HMRC.
Don’t worry – we’ve made this guide so simple that you’ll understand everything in 5 minutes.
First Deadline for £50k+ earners
Quarterly updates to HMRC
Paper records won’t be accepted
Scroll to learn everything
The 60-Second version
Here’s everything you need to know, explained as simply as possible
From April 2026
From April 2027
From April 2028
Register for MTD for Income Tax on the GOV.UK website before your start date.
Understand the difference
There are two separate MTD programmes. Here’s what each one means for your business
MTD for Income Tax is the new way for sole traders and landlords to report their income. It requires digital record-keeping and quarterly updates, making it easier to stay on top of your tax throughout the year.
Powered Now is built for tradespeople and is fully MTD for Income Tax ready. Track your income and expenses as you work, and we’ll handle the quarterly submissions to HMRC automatically.
Applies to sole traders and landlords above thresholds. Focuses on digital records + quarterly updates + a final year-end submission
If you’re VAT Registered, MTD for VAT applies. HMRC guidance states VAT registered businesses should now be signed up and you must use compatible software to keep VAT records and file VAT returns.
Powered Now appears on HMRC’s VAT software list as record‑keeping software suitable for businesses or agents, including the ability to submit VAT Returns and view VAT payment history.
Applies to VAT registered businesses. Focuses on digital VAT record keeping + digital VAT return submission.
THE KEY CHANGES
Here’s everything you need to know, explained as simply as possible
BEFORE MTD
With MTD
You must use HMRC-recognised software to keep records. Paper and manual spreadsheets wont be accepted
BEFORE MTD
With MTD
You’ll send income/expense summaries to HMRC 4 times a year, plus a Final Declaration.
BEFORE MTD
With MTD
Your MTD software will connect directly to HMRC and submit your data automatically.
Important Dates
MTD will affect 2.9 million UK sole traders, with your start date based on total annual income.
First 864,000 affected.
Self-employed individuals and landlords with annual income over £50,000
An additional 1,077,000 will have to adopt digital practices.
Self-employed individuals and landlords with annual income between £30,000 – £50,000
1 year to prepare
Another 975,000 will have to adopt digital practices.
Self-employed individuals and landlords with annual income between £20,000 – £30,000
2 years to prepare
Once MTD applies to you, you’ll send updates to HMRC 5 times per year. Each update is due one month after the quarter ends, followed by one final assessment.
6 April – 5 July
Deadline 7th August
6 October – 5 January
Deadline 7th February
6 July – 5 October
Deadline 7th November
6th January – 5th April
Deadline 7th May
FINAL DECLARATION
Deadline 31st January
After your 4 quarterly updates, you’ll submit a Final Declaration by 31st January the following year. This replaces the traditional Self Assessment tax return.
MTD THAT WORKS FOR TRADES
Powered Now is a job management system for trade professionals, so the data needed for MTD is created naturally as part of the day-to-day workflow (quotes → invoices → expenses), helping records stay accurate and up to date — protecting your business from mistakes, missed deadlines, and HMRC penalties.
When MTD launches, there will be three ways to submit your digital returns:
Xero, Quickbooks, Sage, Free Agent
Not designed for trade companies.
Job Management System
Xero, Quickbooks, Sage, Free Agent
Complicated, expensive and more to learn.
Powered Now
Simple, cost, effective, helps your business, compliance happens as a by-product.
Most job management systems still rely on separate accounting software to meet MTD requirements, meaning data has to be copied, synced, or reconciled later. Powered Now is different.
Because MTD-ready records are created automatically through everyday work like quoting, invoicing, and tracking expenses, compliance happens as a by-product of running the job, not an extra task at the end.
While Making Tax Digital is a big change, it’s designed to reduce mistakes, improve accuracy, and remove the stress of last-minute paperwork. Digital records mean fewer errors, clearer reporting, and a much better view of your business throughout the year — not just at tax time.
Powered Now supports this shift by helping you run your jobs digitally from day one. It’s built for people who manage work on-site, not spreadsheets in an office. Everything is written in plain language, kept deliberately simple, and priced to stay affordable — without the over-complication of traditional accounting systems.
Still GOT QUESTIONS?
Everything you need to know about Making Tax Digital, answered in plain English.
If you’re VAT registered, you must keep VAT records digitally and file VAT Returns using compatible software (or bridging software).
It starts from April 2026 for qualifying income over £50,000, then expands in 2027 and 2028.
Qualifying income is gross income from self-employment and property (before allowances/expenses).
No. Quarterly updates are summaries and the payment deadline remains 31 January.
No—HMRC states they aren’t tax returns. The year-end submission still happens via software.
For VAT, HMRC allows bridging software to connect spreadsheets to HMRC.
For Income Tax, HMRC guidance also describes bridging software that connects to spreadsheet records and can submit updates/returns.
HMRC indicates you can add missed information in the next quarterly update.
Standard deadlines are 7 Aug, 7 Nov, 7 Feb, 7 May (aligned to the tax year).
HMRC’s points-based system applies; for quarterly submissions (including MTD for ITSA) the threshold is 4 points and then a £200 penalty.
HMRC’s campaign guidance indicates limited companies do not need to use MTD for Income Tax (though they may have MTD for VAT if VAT registered).
HMRC’s campaign guidance says partnerships will be required in the future, but not yet (timeline to be set later).
HMRC outlines exemptions for digital exclusion (for example, due to age, disability, health, location, or religious grounds).
Get MTD READY
Join thousands of UK tradespeople who trust Powered Now to handle their invoicing, certificates, and now MTD compliance. Get set up in minutes, not hours.
Download our complete guide to Making Tax Digital for Income Tax
