Making Tax Digital for Tradespeople — Your 2026 Guide
From April 2026, sole traders and landlords with income over £50,000 must keep digital records and submit quarterly summaries to HMRC. Here's what that actually means if you run a one-van plumbing business, an electrical contractor, or a small build firm — without the jargon.
Making Tax Digital (MTD) for Income Tax is the biggest change to UK self-assessment in a generation, and as of April 2026 it's live for the first wave of sole traders and landlords. If you're a tradesperson with gross self-employment or property income over £50,000 in your last tax return, you're in scope. Here's what that actually means in practice — and what you can ignore.
What MTD for Income Tax actually is
MTD ITSA replaces the once-a-year Self Assessment workflow with a quarterly digital one. Instead of typing your income and expenses into a paper SA103 form once a year, you'll send four short quarterly summaries through MTD-compatible software, then submit a final declaration after the tax year ends. HMRC's pitch is that this makes errors easier to catch and reduces last-minute panic.
Who's affected from April 2026
MTD ITSA is being phased in by income band. The threshold HMRC uses is your gross qualifying income — that is, total self-employment and property income before any expenses or allowances, taken from your most recent submitted tax return.
- From 6 April 2026: anyone with gross qualifying income above £50,000.
- From 6 April 2027: anyone with gross qualifying income above £30,000.
- Below £30,000: not in scope yet. HMRC has paused further rollout pending review — it may never apply to the smallest sole traders.
For most one-van tradespeople, £50,000 of gross income is a normal year — even before expenses come out. A jobbing plumber averaging 4 days a week at £350/day is at £56,000 gross before parts. An electrician with a steady run of EICRs and remedials clears the threshold easily. If you're VAT-registered, you're almost certainly in scope from day one.
What you actually have to do
Three things, in order:
- Keep digital records of your business income and expenses — every invoice, every receipt for materials/fuel/tools. They have to live in MTD-compatible software (or a spreadsheet with a 'bridging' product that exports to MTD format).
- Submit a quarterly summary to HMRC by the 7th of the month following the quarter. The submission is a totals-only digest of income and expense categories — not a list of every transaction.
- Submit a final declaration after the tax year ends (deadline 31 January, same as the current Self Assessment). This is where any year-end adjustments, capital allowances, and personal income from other sources (employment, dividends, interest) all reconcile into one final tax bill.
Quarterly submission deadlines for 2026/27
The tax-year quarters are fixed. For the 2026/27 tax year (starting 6 April 2026), submissions are due on the 7th of August, November, February, and May:
- Q1 (6 Apr – 5 Jul 2026): due 7 August 2026
- Q2 (6 Jul – 5 Oct 2026): due 7 November 2026
- Q3 (6 Oct 2026 – 5 Jan 2027): due 7 February 2027
- Q4 (6 Jan – 5 Apr 2027): due 7 May 2027
- Final declaration for the year: due 31 January 2028 (same as the existing Self Assessment deadline)
Penalties — the system has changed too
Alongside MTD, HMRC has moved to a points-based penalty system for late filings. Miss a quarterly submission and you pick up a point. Pick up 4 points (one full tax year of missed submissions) and you get a £200 penalty, then £200 per further missed submission. Late payment is separate — interest from day one, plus a 3% penalty if you're 15 days late and another 3% at 30 days.
The points expire after 24 months of clean filing, which means a single missed quarter doesn't permanently haunt you. But the cumulative cost of habitually-late filing is much higher than under the old once-a-year system.
What good MTD-ready record-keeping looks like
For a one-van tradesperson, you need three categories of digital record:
- Sales invoices — every invoice you issue, with the customer name, date, description, and amount. Sequential numbering (which HMRC has always required) becomes critical now because the records have to be auditable.
- Expense records — receipts for materials, parts, fuel, tools, van running costs, phone bills (business portion), insurance, trade subscriptions, training. Snap and store digitally as you go; the worst time to catalogue 18 months of receipts is the night before a quarterly deadline.
- Mileage records — date, journey, business miles. HMRC accepts the simplified flat-rate (45p per mile for the first 10,000 miles, 25p thereafter for cars and vans). Apps that log this automatically save real money for engineers and plumbers running 15,000+ miles a year.
Where Wedge fits
Wedge is built around the same record-keeping rules MTD codifies. Every invoice you send through WhatsApp gets sequential numbering automatically, a clean VAT breakdown, a CIS section where relevant, and a permanent digital record in your dashboard — which is the underlying source of truth your MTD submissions are built from.
We're not (yet) an MTD-bridging tool that submits the quarterly returns themselves — for that you'll want a bookkeeping product like FreeAgent or QuickBooks Self-Employed that's on HMRC's approved-software list. But Wedge handles the invoicing and record-keeping side of the pipeline, which is the part most tradespeople actually find painful. Pair the two and you've covered both halves.
The big picture
MTD ITSA is the same income tax it always was — same allowances, same rates, same January deadline for the year-end declaration. The actual change is that HMRC is finally requiring the digital records that good record-keeping has always implied. For tradespeople who've been running their books on a paper-and-shoebox system, this is a real shift in habit. For those already invoicing digitally and snapping receipts as they go, it's mostly a paperwork formality.
The biggest mistake we see tradespeople make on MTD is treating it as a software-procurement problem to solve in March 2026. The more useful framing: it's a record-keeping habit you start now, with whatever digital invoicing tool you already trust, plus an MTD-bridging product when April rolls around. The tools are commodity; the habit is the thing that makes the quarterly return painless.
