← Back to Blog

Making Tax Digital: What You Actually Need to Do Before April

21 February 2026

If you're a self-employed tradesperson earning over £50,000 a year, HMRC wants you to keep digital records from 6 April 2026. Not paper receipts in a shoebox. Not a spreadsheet you update once a year in January. Proper digital records, updated regularly, submitted through approved software.

This is called Making Tax Digital for Income Tax, and it's been delayed so many times that most people stopped paying attention. But it's actually happening this time. So here's what you need to know, in plain English, without the usual accountant waffle.

Who does this affect?

Right now, the first wave targets self-employed people and landlords with annual income over £50,000. That's gross income, not profit. So if you're turning over £55,000 but only taking home £35,000 after costs, you're still caught by this.

If you're under £50,000, you've got more time. The threshold drops to £30,000 from April 2027. Below that, HMRC hasn't confirmed dates yet, but it's coming for everyone eventually.

If you're a limited company, this doesn't apply to you yet. Corporation Tax has its own Making Tax Digital rules coming later. For now, this is about sole traders and partnerships.

What does "digital records" actually mean?

It means you need software that keeps a running record of your income and expenses. Every time you invoice a customer or buy materials, it needs recording digitally. Not at the end of the year. As you go.

The records need to include:

• The date of every transaction
• The amount
• A description of what it was for

For income, that means every job you quote and invoice for. For expenses, that means every trip to Screwfix, every fuel receipt, every tool purchase.

You don't need to scan every receipt. But the numbers need to be in a digital system, not a notebook.

What do you need to submit, and when?

Instead of one Self Assessment tax return each January, you'll send HMRC quarterly updates. Four times a year. These are summaries of your income and costs for each three-month period.

The quarters run:

1. 6 April to 5 July (due by 7 August)
2. 6 July to 5 October (due by 7 November)
3. 6 October to 5 January (due by 7 February)
4. 6 January to 5 April (due by 7 May)

After the fourth quarter, you'll also submit a final declaration by 31 January the following year. So you're not escaping the January deadline entirely. You're just adding four more deadlines on top.

What software do you need?

HMRC has a list of approved software on their website. Some of the well-known ones include FreeAgent, Xero, and QuickBooks. There are cheaper options too. Some are free for basic use.

The key thing is the software needs to connect to HMRC's systems and submit your quarterly updates directly. You can't just email them a spreadsheet.

If you already use an accountant, talk to them now. They'll likely recommend software and might handle the quarterly submissions for you. But even with an accountant, you need to be recording things as you go. They can't magic up records from nothing four times a year.

What happens if you ignore this?

Penalties. HMRC is introducing a points-based system. Every time you miss a quarterly deadline, you get a point. Once you hit a certain number of points, you get fined. The fine starts at £200 and goes up from there.

They've said they'll be lenient in the first year. But "lenient" from HMRC still means you'll get letters and eventually get stung. It's not worth the stress.

What should you do right now?

If you earn over £50,000, you have until 6 April to get set up. That's not far off. Here's a sensible plan:

1. Check if you're affected. Look at your last tax return. Is your self-employment income over £50,000? If yes, this is you.
2. Pick your software. If your accountant hasn't recommended something, look at the HMRC approved list. Try the free trials. Pick something you'll actually use.
3. Start recording now. Don't wait until April. Start putting your income and expenses into the software today. Get used to it.
4. Keep your invoices tidy. If your quoting tool already generates proper documents with dates and amounts, you're halfway there. Tools like NippyAgent create PDF quotes and invoices with all the details already filled in, which makes the record-keeping side much simpler.
5. Talk to your accountant. If you have one, ring them. Ask them what they need from you and how the quarterly submissions will work. If you don't have an accountant, consider getting one. The penalties for getting this wrong will cost more than their fees.

Don't panic, but don't ignore it either

This isn't the end of the world. It's more admin, yes. It's annoying, absolutely. But the tradespeople who get on top of this early will have a much easier time than the ones who scramble in June when the first quarterly deadline hits.

The worst thing you can do is nothing. Get your software sorted, start recording, and get on with your actual work. That's what you're good at.