The short answer
MTD for Income Tax replaces one annual bookkeeping rush with a digital record-keeping and quarterly-update routine. SimpleTaxFlow helps sole traders capture business activity, review the numbers and file supported updates without buying a large accounting suite.
When do sole traders have to use MTD?
You need to use MTD for Income Tax when you are registered for Self Assessment, receive self-employment or property income, and your combined qualifying income is above the threshold. HMRC uses gross income before expenses rather than taxable profit.
- Over £50,000: from 6 April 2026
- Over £30,000: from 6 April 2027
- Over £20,000: from 6 April 2028
What changes under MTD for the self-employed?
You keep digital records for each self-employment business, send summary updates during the year and use compatible software to submit the tax return after the tax year ends. Quarterly updates do not replace your final tax return and they are not quarterly tax bills.
- Create and preserve digital income and expense records
- Send an update for each self-employment and property business every three months
- Correct the records when you find an error
- Complete adjustments and other income before submitting the annual tax return by 31 January
MTD quarterly deadlines for sole traders
The recurring filing deadlines are 7 August, 7 November, 7 February and 7 May. Each update contains cumulative totals from the start of the tax year or calendar update year to the end of that update period.
HMRC has said penalty points will not apply to late quarterly updates in the 2026 to 2027 tax year, although late tax-return and late-payment penalties can still apply. That first-year easement should not replace a reliable record-keeping routine.
A simpler MTD bookkeeping workflow
SimpleTaxFlow focuses on the everyday work a sole trader actually needs: capture, organise, review and submit. The web portal is the complete product; WhatsApp is an optional convenience when you are away from your desk.
- Add income and expenses manually or upload receipt evidence
- Import statement files and reconcile rows without creating obvious duplicates
- Create invoices and quotes and track payment status
- See profit and loss, cashflow, unpaid invoices and cashbook exports
- Use filing-readiness checks before sending supported quarterly updates
How to get ready for MTD
Start with the records you already have and build a small repeatable rhythm.
- Check your mandatory start date with HMRC
- List every self-employment and property income source
- Choose compatible software before signing up
- Move current records into a digital format
- Set a weekly review for missing evidence and uncategorised transactions
- Connect HMRC and review the first quarterly update before filing
Frequently asked questions
Is MTD based on turnover or profit?
The threshold test uses qualifying gross income before expenses, often called turnover, from self-employment and property.
Is a quarterly update a tax return?
No. HMRC describes quarterly updates as summaries of digital income and expense records. You still complete and submit a tax return after the tax year ends.
Can I use spreadsheets for MTD?
Spreadsheets may form part of a compatible digital system, but transfers between applications must preserve the required digital links and you still need compatible software to send updates and the tax return.
Does SimpleTaxFlow include invoicing?
Yes. You can create and manage invoices and quotes, track status, and connect paid activity to your bookkeeping records.
Check the official rules
MTD rules can change and individual circumstances matter. Use HMRC’s current guidance to confirm eligibility, exemptions, supported income sources and deadlines.
Turn the guidance into a manageable routine.
Keep records, evidence, reports and supported HMRC submissions together. Free for 30 days, then £5 per month equivalent, billed annually at £60.
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