Do all self-employed have to go digital?

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Not all self-employed people have to go digital right now. Whether you need to make the switch to digital tax reporting depends entirely on your total yearly income.

If you are a sole trader or a landlord in the UK, you have likely heard the term “Making Tax Digital” (or MTD). Change can feel daunting, especially when it involves HMRC, but taking it step-by-step makes it much easier to handle. Here is exactly what you need to know about the new rules and whether they apply to you.

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What is Making Tax Digital?

For years, self-employed workers have filled out a single Self Assessment tax return once a year. Making Tax Digital is HMRC’s new way of doing things. Instead of one yearly paper or online form, MTD requires you to use approved accounting software to keep digital records of your business and send smaller, quarterly updates about your income and expenses.

When Do You Have to Switch?

As of April 2026, the new rules have officially started, but they are being rolled out in phases. HMRC looks at your “qualifying income”—this means your total sales or rental income before you deduct any of your business expenses.

Here is the rollout timeline:

• From April 2026 (Right Now): You must go digital if your total income is over £50,000.
• From April 2027: You must go digital if your total income is over £30,000.
• From April 2028: You must go digital if your total income is over £20,000.

What if you earn under £20,000?

If your total income from self-employment or property is below £20,000, you do not have to join Making Tax Digital right now. You can simply continue doing your annual Self Assessment tax return by the January deadline, just like you always have.

What Does “Going Digital” Actually Mean for You?

If your income means you do fall under the new rules, the way you handle your bookkeeping will change. You will need to:

1. Use approved software: You can no longer rely on a shoebox full of receipts or a basic spreadsheet. You will need MTD-compatible software (like Xero, QuickBooks, FreeAgent, or Sage) to track your money.
2. Send quarterly updates: Every three months, you will use your software to send a quick summary of your income and expenses to HMRC.
3. Submit a final end-of-year return: By the 31st of January each year, you will send a final digital declaration to tie everything up, claim any tax reliefs, and pay your final tax bill. (Your actual tax payment deadlines have not changed!)

What if You Cannot Use a Computer?

HMRC understands that not everyone is able to use digital tools. You can apply to be “digitally excluded,” which means you get an exemption from the digital rules. This might apply to you if:

• Your location means you have no internet access and cannot reasonably get it.
• Your religious beliefs prevent you from using electronic devices.
• Your age, a disability, or a specific health condition makes using accounting software impossible.

If you fall into one of these categories, you can contact the HMRC Self Assessment helpline to explain your situation and ask to be excused from the digital requirements.

What Should You Do Next?

If you are earning over the £50,000 threshold, you need to be using MTD software right now for the 2026/2027 tax year. If you are earning between £20,000 and £50,000, you have a little more time to prepare—but it is a smart move to start testing out digital bookkeeping apps today so you are comfortable with them before your deadline arrives.

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