Making Tax Digital · Guide · 3 min read
Making Tax Digital in April 2027: prepare your trade business
A preparation plan for sole traders joining MTD for Income Tax in April 2027, from checking the relevant return to testing the records and filing route.
If MTD starts for you in April 2027, use the lead time to test the process during an ordinary working month. Buying software in March without checking your records can simply move the old paperwork problem onto a new screen.
Check the right year’s income
HMRC says eligible sole traders and landlords with qualifying income over £30,000 in 2025–26 must use MTD for Income Tax from 6 April 2027. This is not a £30,000 profit test. Use the official eligibility guidance and confirm any exemption with your adviser.
A tradesperson who also receives property income needs to consider the combined qualifying amount. Someone working through a limited company should not apply the sole-trader timetable to the company’s turnover. Keep these distinctions in the conversation before comparing subscriptions.
Autumn: establish what you already have
List where your invoices, receipts, bank records and CIS statements live. Include old phones and email folders, but do not copy everything into multiple new systems. Identify one authoritative record for each transaction and note where the supporting document sits.
Choose one completed month and reconcile it. If the bank shows a £720 receipt, establish which invoice and deductions explain it. If a supplier credited a returned item, keep that credit with the purchase. Give unresolved items a question and an owner, rather than a guessed category.
Winter: test the complete process
Ask your accountant which software they can support and whether it covers your income sources and annual return. A quarterly update feature alone may not cover the whole process. Use HMRC’s software guidance to structure the questions.
Run your sample records through the agreed process without duplicating them in live accounts. Check who reviews changes and whether a corrected transaction updates the intended period. Keep evidence of a supported digital connection between products; a neat spreadsheet does not by itself prove the filing route is compliant.
Before April: make responsibilities explicit
| Question | Your answer |
|---|---|
| Who enters and checks records? | [Name and routine] |
| Who follows up missing documents? | [Name and deadline] |
| Who submits each update? | [Agreed person or agent] |
| Who completes the annual return? | [Agreed person or agent] |
| Where are acknowledgements saved? | [Shared location] |
Do not assume that giving an accountant access means filing is included in their engagement. Confirm the service and costs, and make sure the person doing the work accepts the responsibilities listed.
Keep your current return on track
Preparing for a new system does not erase earlier obligations. Check the deadlines for the return covering the year before you join and the tax payments that remain due. Our MTD overview separates quarterly updates from the annual return.
What to ask a software supplier
- Does this product support my income sources and agent’s workflow?
- Which parts are live, and which are planned?
- What happens if an update fails?
- Can I retrieve the acknowledgement and export my records?
- What is included in the price and what costs extra?
Trade PA’s current submission capability is described on its MTD status page. Check that before relying on it for a filing deadline. Use the readiness checklist to work through the records now. General information; confirm your personal position with HMRC or your tax agent.
Sources and review
Reviewed 15 September 2026. Provider features and rules can change; check the linked source when making a decision.
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