Simplifying MTD IT for the self-employed

From April 2026, HMRC's Making Tax Digital for Income Tax (MTD IT) rules apply to self-employed individuals whose combined gross income from self-employment and property exceeds £50,000 a year. If you're a sole trader, you'll need to change how you report tax to HMRC.

This threshold will then reduce to £30,000 in April 2027, and it's expected to fall further to £20,000 in 2028.

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Why TaxNav

TaxNav eases the process

At TaxNav, we're helping self-employed people across many professions prepare for these changes. Our HMRC-recognised software, combined with our support, makes it easier to maintain digital records, submit the required quarterly updates, and stay fully compliant with HMRC's MTD IT reporting requirements.

You don't have to give up the way you already record your income and expenses. You can continue using your own spreadsheet (or use our ready-made templates) and simply link it via the TaxNav app. The totals are automatically imported into the software and sent securely to HMRC, keeping you fully compliant with MTD IT and with minimum fuss.

If you don’t use a spreadsheet, you can also input your income and expense totals directly into our software.

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Overview

What MTD IT involves for the self-employed

MTD IT is part of HMRC's wider digital strategy to modernise the UK tax system, making tax administration more efficient, accurate, and easier for individuals and businesses. Instead of filing one annual Self Assessment, you'll need to:

Keep digital records

Keep digital records of your trade and property income and expenses in HMRC-recognised software

Send quarterly updates

Send quarterly updates of your year-to-date trade and property income and expenses to HMRC

Submit a Final Declaration

Submit a Final Declaration at the end of the tax year, including personal items such as pension income

At the end of the tax year, you'll also need to make any adjustments or tax relief claims before submitting your final declaration by the following 31 January to confirm your total tax liability. You will still need to pay what tax you owe by 31 January, as you do now.

Who's affected

Who must follow MTD IT

MTD for Income Tax applies to self-employed individuals and sole traders whose combined gross income from self-employment and property exceeds the threshold. This includes sole traders across a wide range of sectors, such as:

Those in the building trade

Property owners

Consultants and IT contractors

Psychiatrists, physiotherapists and other healthcare professionals

Personal coaches

Product makers

Educators and tutors

Those providing outsourced services such as HR, marketing or finance

Anyone who is self-employed with both trade and property income

These are just a few examples. If you're self-employed and earning above the threshold, the new rules will apply to you.

Don't wait

Getting MTD IT-ready

Now MTD IT has arrived, it’s important to get set-up and ready:

Double-check if it applies to you. Check with HMRC when your self-employed and/or property income means you need to join.
Register with HMRC for MTD IT before you begin.
Select your software - you must use HMRC-recognised software. TaxNav is designed to keep things simple
Start keeping and recording your digital records - for example, directly into our software or in a spreadsheet using our bridging software. Until your final return this does not need to be 100% accurate.
Diarise when you need to submit your quarterly updates, TaxNav will remind you.
Diarise when you need to complete your final declaration, TaxNav will remind you..

People with income over £30,000 from self-employment and/or property will need to join MTD IT from April 2027. You can, however, volunteer to join early and get familiar with it before your HMRC deadline.

Check out our handy ‘get-ready’ guide.

Benefits

What are the benefits for sole traders?

MTD IT isn't just about meeting new rules. It can also help you manage your business finances more effectively.

Clearer view of your tax position

Year-to-date updates four times a year so you know how much tax you owe throughout the year, not just at the end

Fewer surprises

Regular reporting makes it easier to budget and plan ahead

Less to do at year-end

Keep records up to date as you go and avoid the last-minute stress of sorting paperwork

Reduced errors

Compatible software helps cut down on mistakes, missed claims and manual inputting

Better control of your finances

Many people find digital record-keeping helps them stay organised and make quicker decisions

Over time, MTD IT can help you feel more in control and confident when managing tax, giving you more time to focus on your work and customers.

Our support

How TaxNav supports the self-employed

At TaxNav, we've been part of HMRC's MTD IT pilot throughout the 2025/26 tax year and have built up considerable experience. Our software and support have been designed to handle all types of self-employed income, whether you operate in a single trade, manage property alongside your business, or have multiple income sources.

Here's how we can make the transition to Making Tax Digital for Income Tax easier and less stressful.

Stay compliant with confidence

Review your current record-keeping and explore software options that meet HMRC's requirements

Record and report with ease

Our simple online platform lets you maintain digital records of your trade and property income and expenses from your phone or laptop. You can also:
  • Use our ready-made spreadsheet templates to track your income and expenses
  • Use our bridging software to continue working with your preferred spreadsheets while still meeting HMRC's MTD IT filing requirements
  • Submit your quarterly updates and annual declaration directly through the software
You don't have to abandon your current way of working. Simply link your spreadsheet via our software to the HMRC MTD IT system and continue as normal.

Simple, secure and cost-effective

TaxNav keeps your information safe and secure with encrypted data, so it stays private. Also:
  • It's an easy-to-use online platform, with no downloads or complicated setup
  • Our step-by-step guidance simplifies reporting
  • Expert support is available if you get stuck and we have lots of helpful how-to videos
  • Cost-effective compared with larger bookkeeping packages. An annual subscription is £60+VAT or you can pay as you go for £6+VAT a month
  • You automatically receive a 30-day free trial

Start early and stay ahead

Whether you're a sole trader in one profession or managing income from multiple sources, TaxNav keeps MTD IT simple and compliance straightforward. It ensures you keep digital records, prepare quarterly updates, and complete your final Declaration without unnecessary hassle.

‍If you're ready to try simple, affordable software built around how you actually work, TaxNav is ready when you are.

Important: You'll need to sign up for MTD IT with HMRC first before you can complete onboarding with TaxNav.

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