Preparing for Making Tax Digital 2026
05 November 2025
From next year, sole traders and landlords earning more than £50,000 will be required under Making Tax Digital (MTD) to report income and expenses quarterly using specialist bookkeeping software, as tax returns move fully online.
Christine Nisbet, Finance Director at FBR Seed, said: “We speak to sole traders every week who still don’t realise this change is coming, or how close it is. From April next year, manual tax returns will no longer be accepted. Instead, submissions must be made quarterly through HMRC-recognised software like Xero or Sage. This is a big shift for people used to paper records or Excel spreadsheets. Many are simply unaware of the changes, or unsure how to go about getting set up, and we want to make sure as many businesses as possible understand what’s coming, so they can stay compliant and avoid unnecessary headaches down the road.”
While MTD will first apply to those earning over £50,000, the threshold will fall to £30,000 in 2027 and £20,000 in 2028, eventually covering all sole traders.
Originally introduced for VAT-registered businesses in 2019, the reforms now represent the most significant shift yet for the self-employed, with digital reporting set to become the default for millions across the UK.
Christine added: “The changes aren’t as daunting as they might sound; it’s simply something that businesses need to prioritise now to avoid falling behind. Our team is here to help at every stage, whether that means setting up the software, showing clients how to use it, or handling the entire process. It’s a completely tailored service, shaped around how hands-on or hands-off each client wants to be. The best part is that it’s genuinely affordable. This support doesn’t come with a hefty price tag; it’s accessible and designed to take the stress out of the switch to digital.”
As a certified Silver Xero Partner, FBR Seed can help clients access Xero’s MTD-ready package, available from just £7 per month. Get in touch with the team today to find out how we can support you.