Making Tax Digital for Income Tax is a UK government initiative from HMRC. It changes how you keep records and submit your Income Tax information.

If you’re self-employed or a landlord, follow these rules depending on your income:

• From April 2026, you must follow MTD for Income Tax if your annual business or property income is over £50,000
• From April 2027, you must follow MTD for Income Tax if your income is over £30,000
• From April 2028, you must follow MTD for Income tax if your income is over £20,000

Set up Making Tax Digital for Income Tax

What this means for you in Sage Sole Trader

Sage Sole Trader is designed to support MTD for Income Tax.

You can use it to:

• Record your income and expenses digitally
• Keep your records up to date throughout the year
• Send quarterly updates to HMRC
• Submit your end of year declaration (coming soon)

Watch our video: 

How this differs from VAT

MTD for Income Tax is separate from VAT.

• MTD for VAT applies to VAT registered businesses
• MTD for Income Tax applies to self-employed individuals and landlords

Sage Sole Trader only supports Income Tax. It doesn't support VAT submissions.

If you need to manage VAT, use Sage Accounting.

Either Upgrade your Sage subscription, or if you need both: Add a business to your existing account.

What MTD does and doesn’t change

MTD changes how you report your income to HMRC. It doesn’t change your tax calculation.

It does:

• Require digital record keeping
• Require regular updates to HMRC

It doesn't:

• Change how much tax you pay
• Change how you invoice customers

You can still raise invoices in the way that works for your business. Ensure your records are accurate and complete in Sage Sole Trader.