MTD readiness checklist for sole traders and landlords

Last updated 16 October 2026

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The promise: in 30 minutes, find out whether Making Tax Digital for Income Tax applies to you, and what to have in place before your next deadline.

Time: about 30 minutes to work through. Longer if you still need to choose software. Cost: this checklist is free. MTD itself needs HMRC-recognised software. GOV.UK says some free products are available for people with simple tax affairs (GOV.UK). Who it’s for: sole traders and landlords in the UK who file a Self Assessment return. Accountants can use it with clients.

Last checked: 16 Oct 2026.

1. Does MTD apply to me, and when?

MTD for Income Tax depends on your “qualifying income”: your gross self-employment and property income added together. Use turnover, not profit (HMRC, 5 Oct 2026).

Source: GOV.UK, Find out if and when you need to use MTD for Income Tax (updated 26 Mar 2026). The page now gives 6 April 2028 as the start date for the £20,000 stage. Partnerships don’t need to use MTD yet (GOV.UK exemptions).

• I’ve added up my gross self-employment income and gross property income from my last tax return.
• I know which row of the table applies to me.
• I’ve checked my HMRC letters. HMRC writes to people it thinks need to sign up, but checking is still your responsibility (GOV.UK).
• If my income is close to a threshold, I’ve diarised a check for when my next return is filed.

2. Could I be exempt?

Some exemptions are automatic and some you have to apply for (GOV.UK, exemptions page, updated 28 May 2026).

• Qualifying income £20,000 or less: automatically exempt.
• No National Insurance number before the start of the tax year: automatically exempt.
• Specific returns or pages: some claims and supplementary pages on your 2024 to 2025 return give an automatic exemption, either until April 2027 or beyond. Examples are averaging relief (SA103), qualifying care relief, SA107, SA109, Minister of religion (SA102M) and Lloyd’s members. Partners claiming averaging relief on SA104 have to apply instead. Check the list on GOV.UK.
• Digitally excluded: you have to apply. This covers cases where age, health, disability, location or religious beliefs mean it isn’t reasonable for you to use software.
• I know HMRC will not accept an application if the only reason is: I filed on paper before; I’m unfamiliar with software; I only have a few records; or it costs time or money (same page).
• If I think I’m exempt, I’ve read how to apply and I’m applying before I need to start.

Exempt doesn’t mean no tax return. You still file Self Assessment as normal.

3. Am I signed up?

• I’m registered for Self Assessment and have filed a return in the last 2 years, which you need to sign up (GOV.UK).
• I’ve chosen software before signing up. GOV.UK says to choose it first (software guidance).
• I’ve signed up, or my agent has. From September 2026, HMRC started signing up people who should already be using MTD for 2026 to 2027 but hadn’t (GOV.UK sign-up guidance).
• I’ve checked how to prove my identity. On 13 October 2026 HMRC removed the option to prove your identity by answering questions, so check which ID options you’ll need before you start (GOV.UK).

4. Have I got the right software?

Your software must let you, or your agent, keep digital records, send quarterly updates and submit your tax return by 31 January (GOV.UK, updated 13 Jul 2026).

• I’ve used HMRC’s software finder tool, linked from the page above. Everything it lists has been through HMRC’s recognition process.
• It supports all my income sources (for example, a trade and a rental).
• It can send quarterly updates and submit the tax return. If not, I have a second product that does the return.
• It works with my update periods (standard tax-year quarters or calendar quarters).
• If I’m VAT-registered, I’ve checked whether my VAT software also covers MTD for Income Tax.
• If I use spreadsheets, I’ve picked “bridging” software that connects to them.
• I know I can only use one product for each separate submission. For example, a landlord can’t split property quarterly updates across two products.

5. Are my records digital?

From GOV.UK: Create digital records:

• I record each income and expense with the amount, date and category, using Self Assessment categories.
• I keep separate records for each sole-trader business. All UK properties count as one UK property business.
• If I use more than one product, they’re digitally linked: linked cells, CSV import or export, API, and so on. No copying and pasting once a record has been sent.
• I check bank-feed transactions before each update. Some transactions don’t come through in full.
• I still keep original records like invoices and bank statements, for at least 5 years after the 31 January deadline.
• If my turnover is under £90,000, I know I may be able to use simpler categories (with extra rules for residential landlords).
• If I signed up partway through the year, I’ve caught up my records from the start of the tax year.

6. Do I know my quarterly deadlines?

From GOV.UK: Send quarterly updates:

• The deadlines are in my calendar with a reminder a week before each one.
• I know updates are cumulative: each one covers the year to date, so mistakes can be fixed in the next one.
• I know I must send an update even if there was no income or expenses that quarter.
• After each update, I check my HMRC online account shows “You sent a quarterly update” under recent activity.
• I look at the tax estimate my software shows after each update.

7. Am I ready for the tax return?

From GOV.UK: Submit your tax return:

• I know the tax return is due 31 January after the tax year ends. For 2026 to 2027, that’s 31 January 2028.
• I still file my 2025 to 2026 return the usual way by 31 January 2027, because that’s the year before I joined.
• I’ll add my other income through my software (savings interest, dividends, partnership share and so on), and check what HMRC pre-fills (PAYE, pensions, CIS deductions and more).
• I know I can’t claim a refund within the MTD tax return itself. GOV.UK explains the separate route.
• Payment dates haven’t changed.

8. Do I understand the penalties and this year’s easement?

From GOV.UK: Penalties for MTD for Income Tax (updated 30 Mar 2026):

• 2026 to 2027 easement: there are no penalties for missing a quarterly update deadline this tax year. I still need to send all four before I can submit my tax return, and a late tax return or late payment is still penalised.
• Points: each missed tax return deadline earns 1 point from the year you join. From 2027 to 2028, each missed quarterly deadline earns 1 point too (only one point per deadline, even with several businesses). At 4 points, there’s a £200 penalty, then £200 for each further miss.
• Points below the threshold expire after 24 months. At the threshold, you need 12 months of on-time filing (and everything outstanding filed) to reset.
• Late payment: in your first year you have 30 days before penalties start. After that it’s 15 days. For 2026 to 2027 the penalty is 3% at day 15 and another 3% at day 30, plus 10% a year from day 31 (for up to 2 years). It rises to 4% and 4% for 2027 to 2028.
• If I can’t pay on time, I’ll contact HMRC early about a payment plan. Penalties pause once an agreed plan is followed.
• I know MTD penalty points are separate from any VAT penalty points.

What can go wrong?

• Using profit instead of turnover. The threshold uses gross income. A landlord with £35,000 rent and big costs is still over £30,000.
• Forgetting the nil return. If there was no income or spending in a quarter, you still have to send the update.
• Two products that don’t talk to each other. Copying figures by hand between a spreadsheet and bridging software breaks the digital-link rule once records have been sent.
• Treating this year’s easement as a free pass. There are no points for late quarterly updates in 2026 to 2027, but you can’t file the tax return without them, a late tax return still earns a penalty point, and late payment penalties still apply.
• Assuming HMRC’s letter is the final word. HMRC writes to people, but checking is your responsibility.
• Rules still moving. GOV.UK updates these pages often (the quarterly updates page changed on 16 Oct 2026). Re-check the linked pages before you rely on a date.

Want to automate the boring part?

Our guide Turn receipt photos into an MTD-ready expenses spreadsheet with AI shows one way to get receipts into tidy digital records each week. You’re already on the Friday email, so the next automation arrives on Friday. Questions? Reply to any of our emails or write to [email protected].

Not advice: this checklist is general information, last checked against GOV.UK on 16 Oct 2026. It isn’t tax or legal advice. Rules change, so check the linked GOV.UK pages or ask an accountant about your own situation.