Making Tax Digital for tradespeople
A plain-English guide to what's changing, who it affects, and how to be ready — without turning your evenings into admin.
Making Tax Digital for Income Tax is the biggest change to how sole traders handle tax in years. The short version: instead of one Self Assessment return a year, you keep digital records as you go and send HMRC a summary every quarter. It sounds like more admin. Done right, with the records kept automatically, it's actually less.
The first deadline is here — 7 August 2026
If you came in from April 2026 (qualifying income over £50,000), your first quarterly update — covering 6 April to 5 July 2026 — is due by 7 August 2026. The reassuring part for year one: HMRC has confirmed no late-submission penalty points for quarterly updates during the first year. The points-based penalties (a point per missed update, a £200 fine once you reach four) start from the second year. So this year is about getting the habit in place, not panic. And if your income is over £30,000, you're in from April 2027 — which makes now the calm time to get your records digital, well before it's mandatory.
Does it apply to you?
It's being phased in by income, starting with higher earners:
- From 6 April 2026 — qualifying income over £50,000
- From 6 April 2027 — over £30,000
- From 6 April 2028 — over £20,000
Found your date? It's the record-keeping habit that takes time to build, not the filing. Larzo keeps yours digital as you work.
Larzo keeps the digital records MTD requires. It doesn't file to HMRC — your accountant still does that.
Start free — no card needed"Qualifying income" is your gross income from self-employment and property before expenses. HMRC works it out from your Self Assessment return and writes to confirm your start date, so you don't have to guess. If you're near a threshold, check your position on GOV.UK or ask your accountant.
What it actually requires
Three things:
- Digital records of your business income and expenses — kept in software, not a carrier bag of receipts.
- Quarterly updates — a summary of income and expenses sent to HMRC four times a year using MTD-compatible software. It's a summary, not a tax return, and there's no tax to pay with it — your payment dates don't change.
- A final declaration after the tax year, replacing the old Self Assessment return.
The real shift is the record-keeping. Once your income and expenses are digital and up to date, the quarterly summaries are quick. It's the shoebox-at-year-end habit that MTD is designed to end.
Where Larzo fits — and where it doesn't
Let's be straight about this, because plenty of software isn't. Larzo keeps the records. It does not file to HMRC.
Larzo keeps your invoiced income and your expenses as digital records — snap a receipt and it reads the vendor, amount and VAT; every invoice is dated and stored — and it emails your accountant a clean monthly set: income, expenses, VAT totals, what's outstanding. So when your quarterly update is due, everything's already in order.
The submission itself is made by your accountant, or by you through MTD-compatible software. Larzo is the record-keeping layer that makes that submission painless — not the software that does the filing. Anyone telling you a quoting app makes you "MTD compliant" on its own is overselling it.
Get your records digital before it's your turn
Quote, invoice, snap receipts — your records keep themselves while you work.
Start free — no card →14 days free · Built for UK trades
How to get ready
- Find out if and when it applies to you — check the thresholds above against your income, and wait for HMRC's letter.
- Stop keeping paper. Start recording income and expenses digitally now, so the habit's in place before it's mandatory.
- Talk to your accountant about how they'll submit your quarterly updates and what they need from you.
- Get your records feeding them automatically, so quarter-end is a five-minute check rather than a weekend.
Questions, answered
Does Making Tax Digital for Income Tax apply to me?
It is being phased in by income. From 6 April 2026 it applies to sole traders and landlords with qualifying income over £50,000; from 6 April 2027 the threshold drops to £30,000; and from 6 April 2028 to £20,000. HMRC works your qualifying income out from your Self Assessment return and writes to confirm your start date. Check your own position on GOV.UK or with your accountant.
When is the first quarterly deadline?
For those in from April 2026 (qualifying income over £50,000), the first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026. If you come in later — over £30,000 from April 2027, or over £20,000 from April 2028 — your first deadline follows the same quarterly pattern from your own start date.
What happens if I miss a quarterly update?
HMRC has confirmed there are no late-submission penalty points for quarterly updates during the first year. From the second year a points-based system applies: a point for each missed deadline, and a £200 penalty once you reach four points. Your payment dates and final declaration are separate and still apply. This is general information, not advice — check GOV.UK or your accountant for your own position.
What does it actually require?
Keeping digital records of your business income and expenses, sending HMRC quarterly summaries using MTD-compatible software, and a final declaration after the tax year. It replaces the once-a-year manual Self Assessment habit with digital records kept as you go.
Is Larzo MTD-compatible filing software?
No — and we would never claim to be. Larzo keeps your income and expense records in digital form and hands your accountant a clean set every month. The quarterly submissions to HMRC are made by your accountant, or by you through MTD-compatible software. Larzo is the record-keeping layer that makes that submission painless, not the software that files it.
Do I still need an accountant?
For most sole traders, yes — and Larzo is built to make their job easier, not to replace them. Larzo keeps the records tidy and sends them over automatically; your accountant handles the submissions and the advice. If anything here affects your tax position, speak to them.
Does this replace MTD for VAT?
No. Making Tax Digital for VAT is a separate, already-live scheme for VAT-registered businesses. This page is about Making Tax Digital for Income Tax, which covers sole traders and landlords.
Keep your records ready, automatically
Larzo quotes, invoices and captures your expenses on your phone, then emails your accountant a clean set of records every month — so whoever files your quarterly updates has everything they need, in order, without you chasing paper.