Making Tax Digital for the Self-Employed: Everything You Need

Quick answer: Making Tax Digital for the self-employed replaces the annual Self Assessment return with four quarterly updates plus a final declaration, kept in compatible software with digital records ,affecting sole traders with qualifying income above £50,000 from April 2026, £30,000 from 2027, and £20,000 from 2028.

If you work for yourself, this is the biggest change to how you report income in a generation. Here’s everything in plain terms ,no jargon, no scaremongering.

What’s actually changing under MTD?

Instead of one annual Self Assessment return, you’ll keep digital records and send HMRC four quarterly updates plus a final declaration. The goal is real-time visibility of your tax position rather than a once-a-year reckoning. Compare old and new in Self Assessment vs MTD.

Who is affected, and when?

It’s based on qualifying income ,your gross self-employment (and property) income combined:

Above £50,000 ,from April 2026
Above £30,000 ,from April 2027
Above £20,000 ,from April 2028

Confirm your date in MTD deadlines and timeline and check your status in am I affected by Making Tax Digital?

What do you actually need to do?

Keep digital records of income and expenses ,see digital record keeping for HMRC.
Use MTD-compatible software ,if you’re on spreadsheets, read switch spreadsheets to MTD software.
Submit quarterly updates ,walk through it in quarterly updates HMRC walkthrough.
Claim everything you’re entitled to ,see allowable expenses for the self-employed.
Register with HMRC ,follow how to sign up for MTD income tax.

Can you do MTD without an accountant?

Yes. You don’t need to hire help to stay compliant. With the right software, the heavy lifting is automated ,see bookkeeping without an accountant, the freelancer view in bookkeeping for freelancers, and the decision framework in do I need an accountant under MTD?

How does CleanBooks AI make MTD effortless?

CleanBooks AI connects to your bank, lets Keeva categorise everything, keeps a live tax estimate and files your quarterly updates to HMRC. Your dashboard answers the three questions every self-employed person asks ,*am I profitable, will I run out of cash, what do I owe HMRC* ,without you touching a spreadsheet. For the dedicated sole-trader path, see MTD for sole traders and the buyer’s guide in best MTD software for sole traders.

Get compliant the easy way. Start with CleanBooks AI.

Frequently asked questions

Does MTD apply to all self-employed people?

Not immediately. MTD for Income Tax applies based on qualifying income: above £50,000 from April 2026, £30,000 from April 2027, and £20,000 from April 2028. Those below the lowest threshold aren’t currently mandated, though they can join voluntarily.

How often do self-employed people file under MTD?

Self-employed people under MTD file four quarterly updates during the tax year, plus one final declaration by 31 January. That replaces the single annual Self Assessment return.

Do I still file a Self Assessment return under MTD?

The annual Self Assessment return is replaced by the MTD final declaration, which is still due by 31 January. You also submit four quarterly updates during the year, which Self Assessment didn’t require.

What records do self-employed people need to keep under MTD?

You must keep digital records of your business income and expenses in MTD-compatible software. Paper records or a basic spreadsheet alone won’t meet the requirement unless bridged to HMRC.

Making Tax Digital for the Self-Employed: The Complete Guide