Making Tax Digital is coming – and if you’re a sole trader or landlord earning over £50,000, it’s coming for you sooner than you think. With so much noise online, it can be hard to separate fact from fiction.

We’ve pulled together the most common myths and questions we hear from tradespeople every day, so you can stop worrying about the wrong things and start getting ready for the right ones.

Myth 1: “MTD doesn’t apply to me”

This is probably the most common one we hear.

MTD for Income Tax (officially called MTD for IT) applies to self-employed individuals and landlords with a combined income over £50,000 from April 2026. From April 2027, that threshold drops to £30,000. This will drop to £20,000 by April 2028.

So if you’re a tradesperson or landlord with an income of above those thresholds – this is very much for you.

Myth 2: “I’ll just carry on using spreadsheets”

Spreadsheets won’t cut it under MTD. HMRC requires you to keep digital records and submit quarterly updates using HMRC-recognised software. That means software that can talk directly to HMRC – not a spreadsheet you fill in yourself.

Bridging software can help you meet the initial MTD requirements, but it’s really a short-term workaround, not a long-term solution that will make your life easier as the rules evolve.

The good news? The right software doesn’t have to be complicated. Tools built specifically for tradespeople make this straightforward.

Myth 3: “My accountant will handle everything”

Your accountant is invaluable – but MTD changes the day-to-day for you, not just them. You’ll need to be keeping digital records of your income and expenses throughout the year, not just at the end of it. Your accountant can guide you, but the responsibility for having compliant software sits with you.

An accountant can add real value to your business – but MTD compliance itself doesn’t require one.

Myth 4: “It’s just another tax – nothing will really change”

MTD isn’t a new tax. However, it does change how you report. Instead of one annual Self Assessment, you’ll submit quarterly updates to HMRC throughout the year, plus a final end-of-year declaration. That means your records need to be up to date all year round, not just come January.

For tradespeople who’ve been doing a mad scramble every January, this is actually a chance to get on top of things properly.

FAQ: What counts as a digital record?

A digital record is simply a record of your income and expenses kept in software – things like invoices you’ve raised, costs you’ve incurred, and payments you’ve received. As long as it’s captured in compliant software, you’re covered.

FAQ: What are the quarterly deadlines?

There are four submission windows per year, roughly aligned to the end of each quarter. Missing them can result in penalty points under HMRC’s new system, so staying on top of it throughout the year is key.

You can view the specific dates here: https://powerednow.com/making-tax-digital/#deadlines

FAQ: Do I need to change my current software?

Not necessarily – but your software does need to be HMRC-recognised for MTD. If you’re currently using something that isn’t, or relying on spreadsheets and paper records, now is the time to look at your options.

FAQ: When should I start getting ready?

Honestly? Now. The businesses that will find MTD easiest are the ones that have already built good habits around digital record keeping. Leaving it until April 2026 means a last-minute rush – and that’s rarely a good time to learn new software.

At Powered Now, we’ve built our software specifically for tradespeople – so invoicing, expenses, and MTD readiness all sit in one place. If you’re not sure whether you’re ready, we’re happy to help you work it out.

Find out more: powerednow.com