Making Tax Digital is now live for the first group of sole traders and landlords. From 6 April 2026, MTD for Income Tax applies to people with qualifying income over £50,000, based on their 2024/25 Self Assessment tax return. From 6 April 2027, the threshold drops to over £30,000, based on the 2025/26 tax year. From 6 April 2028, it drops again to over £20,000, based on 2026/27 income.
If you are in scope and you are not already using MTD-compatible software, you need to act now. QuickBooks is one of the most widely used cloud accounting platforms for small businesses, sole traders and landlords, and this guide explains why upgrading makes sense, what the rules require, and how to make the transition as smooth as possible.
What Making Tax Digital for Income Tax actually means
MTD for Income Tax changes how self-employed individuals and landlords report income to HMRC. Instead of keeping records however you like and submitting one annual Self Assessment return, you must keep digital records throughout the year and use compatible software to send updates and submit your tax return.
You need to send quarterly updates to HMRC every 3 months for each relevant self-employment or property income source. These updates are summaries of your income and expenses. They are not full tax returns, and you do not normally need to make accounting or tax adjustments before sending them.
After the tax year ends, you still need to submit your final tax return through compatible software, including any other income and final adjustments. This means 4 quarterly updates plus the year-end tax return.
Spreadsheets can still be used in some circumstances, but not on their own. If you use spreadsheets, they must be digitally linked to bridging software or another compatible product that can send the information to HMRC. For many people, a full cloud accounting system is simpler.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
You can read a full breakdown of the timeline and what each stage involves in our post on MTD timelines and quarterly updates.
Who is affected and when
The rollout of MTD for Income Tax is being phased. Understanding which phase applies to you is the starting point for planning your upgrade.
| Phase | Who is affected | Mandatory from |
|---|---|---|
| Phase 1 | Sole traders and landlords with qualifying income over £50,000, based on 2024/25 | 6 April 2026 |
| Phase 2 | Sole traders and landlords with qualifying income over £30,000, based on 2025/26 | 6 April 2027 |
| Phase 3 | Sole traders and landlords with qualifying income over £20,000, based on 2026/27 | 6 April 2028 |
| Partnerships | Timeline not yet confirmed | TBC |
| Limited companies | Not within MTD for Income Tax | Not applicable |
Qualifying income means your gross income from self-employment and property combined, before expenses. If you have income from both a trade and a rental property, both streams count towards the threshold. If you jointly own a property, only your share of the income normally counts.
Even if you fall below the current threshold, the direction of travel is clearly towards more digital record-keeping. Getting set up before the deadline is far less stressful than scrambling to comply at the last minute.
Our post on MTD for income tax covers the qualifying criteria in more detail.
Why QuickBooks is the right choice for MTD compliance
There are several MTD-compatible software options on the market, and HMRC maintains a list of recognised software products. HMRC does not recommend one product over another, but QuickBooks is a strong option for many small businesses, landlords and sole traders because it is practical to use day to day, not just technically compliant.
QuickBooks can support MTD digital record-keeping and HMRC submissions on suitable plans. It allows you to keep records, categorise transactions and submit the required updates through compatible software, without relying on a manual spreadsheet process.
QuickBooks also provides bank feeds, which can import transactions from your business bank account into the software. This reduces manual data entry and makes it much easier to keep records current throughout the year.
As a certified QuickBooks accountant, Asmat & Co can access your QuickBooks file, review your records, advise on categorisation, and submit MTD updates on your behalf where appropriate. This collaborative way of working is far more efficient than the traditional annual handover of receipts and bank statements.
The limitations of spreadsheets under MTD
Many self-employed people and landlords currently keep their records in Excel or Google Sheets. Under MTD for Income Tax, spreadsheets alone are not enough. They must connect digitally to compatible software that can send quarterly updates and the final tax return to HMRC.
Bridging software can work, and we covered this in more detail in our post on bridging software vs cloud accounting. However, it adds another layer to manage. You still need to maintain the spreadsheet accurately, keep digital links intact, and make sure the submission software can meet the MTD requirements.
For many people, the monthly cost of QuickBooks is better value than continuing with spreadsheets plus bridging software, especially once bank feeds, receipt capture and reporting are taken into account.
What QuickBooks actually does for your business
QuickBooks is not just an MTD compliance tool. It is a cloud accounting platform that helps you run your business more clearly.
Bank feeds can import transactions so you are not manually entering every payment and receipt. Invoicing lets you create and send professional invoices, track payments, and chase overdue amounts. Expense tracking allows you to capture receipts and attach them to transactions. VAT returns can be prepared and submitted through compatible software where your plan and setup support it. Payroll can also be added where suitable.
The reporting capability is particularly valuable. Rather than waiting until year end to understand performance, you can review profit and loss, cash flow and balance sheet information from live data. This supports better financial reporting and better decisions throughout the year.
QuickBooks and VAT returns under MTD
MTD for VAT already applies to all VAT-registered businesses. If your business is VAT registered, you may already use compatible software, but you should check whether the software you use for VAT also supports MTD for Income Tax, if that applies to you.
QuickBooks can support both MTD for VAT and MTD for Income Tax on suitable plans, which can simplify your records and reduce duplication. Your VAT return accountant can manage VAT compliance and income tax updates from the same underlying records where the setup is correct.
If you are not yet VAT registered but are approaching the £90,000 VAT registration threshold, it is worth reading our guide on how VAT registration can affect your price and our MTD for VAT guide so you understand what registration involves.
Common MTD pitfalls and how QuickBooks helps you avoid them
Making Tax Digital introduces new habits as well as new rules. Our post on MTD pitfalls and the 10 common mistakes covers these in detail, but a few issues are worth highlighting.
Missing quarterly deadlines is a common risk. HMRC uses a points-based penalty system for late submissions, although there are no penalty points for missed quarterly updates in the 2026/27 tax year for those first brought into MTD from April 2026. That easement should not be treated as permission to ignore the rules, because digital records and year-end filing still matter.
Incorrect categorisation is another issue. If transactions are coded wrongly, your updates may be inaccurate and the problem can carry through to the final tax return. QuickBooks can use rules and automated suggestions, but you or your accountant still need to review the figures.
Mixing personal and business transactions is a frequent problem for sole traders. QuickBooks works best when connected to a dedicated business bank account, which makes it easier to keep clean, complete records.
Getting your records in order before you switch
If you are planning to upgrade to QuickBooks, the ideal time to make the switch is at the start of a tax year or accounting period. This gives you a clean starting point and avoids splitting records between systems.
Before you migrate, make sure your existing records are complete and accurate. Reconcile your bank account, sort outstanding transactions, and check opening balances. If your records are behind, our post on what to do if your bookkeeping is behind is a practical starting point.
Once you are set up, commit to a weekly or monthly bookkeeping routine. Quarterly MTD updates are much easier when your records are current, rather than rebuilt in a rush before each deadline.
QuickBooks for sole traders
If you operate as a sole trader, QuickBooks can be a practical fit. It can help you track income, expenses, mileage, receipts and tax information in one place.
Under MTD for Income Tax, sole traders with more than one trade need separate digital records and separate quarterly updates for each source of self-employment income. Getting this right at setup is much easier than untangling it later.
You can read more in our posts on self-assessment for sole traders and registering as self-employed in the UK.
If you are thinking about incorporating your business as income grows, our guide on sole trader to limited company is worth reading before you make any decisions.
QuickBooks for landlords
Landlords are one of the groups most affected by MTD for Income Tax, and many are still not fully prepared. If your qualifying income from property and self-employment was over £50,000 in 2024/25, you are likely to be in the first MTD phase from April 2026. If your qualifying income was over £30,000 in 2025/26, you are likely to be brought in from April 2027.
QuickBooks can help landlords record rental income, mortgage interest and allowable expenses. HMRC treats UK property income as one UK property business, although you may still want to track properties separately for your own management and reporting.
If you are not already keeping thorough records of your rental income and expenses, our guide on rental income and expenses is a useful starting point. If you are considering whether to hold properties personally or through a company, our post on how to set up a buy-to-let company explains the pros and cons.
How Asmat & Co supports you through the QuickBooks transition
As certified QuickBooks ProAdvisors, our team at Asmat & Co can help you get set up correctly, make the most of the software, and stay on top of your MTD obligations throughout the year. We work with sole traders, landlords, limited companies and partnerships across Slough, Reading and the surrounding area.
Our approach is hands-on. We help you set up your QuickBooks account, connect your bank feeds, categorise opening transactions and establish a routine that works for your business. Once you are up and running, we can review your records regularly, submit your quarterly MTD updates where appropriate, and make sure your final tax return is accurate and on time.
This means that when it comes to your accountant for tax return at the end of the year, the information is already organised and checked. Your year-end process becomes a review rather than a reconstruction.
We also provide bookkeeping service for small businesses if you would prefer us to handle day-to-day data entry and reconciliation. For businesses in Reading, our local team offers the same level of support through our accountants in Reading service.
MTD software: is QuickBooks right for every business?
QuickBooks is our recommended platform for many small businesses and self-employed individuals, and it is the software we use and support across much of our client base. However, it is not the only option, and the right choice depends on your situation.
Our post on MTD software shortlist for small businesses covers the main alternatives and what each one is best suited to. The key factors include transaction volume, payroll needs, number of users, reporting requirements, budget and whether you want to manage bookkeeping yourself or hand it to your accountant.
For most businesses we work with, QuickBooks offers a strong balance of capability, ease of use and cost. Because our team is trained on QuickBooks, the collaboration between you and us is smoother too.
Frequently asked questions
I already use spreadsheets for my records. Do I really need to switch?
Spreadsheets on their own are not enough under MTD for Income Tax. You either need MTD-compatible software such as QuickBooks or bridging software that digitally links your spreadsheet to HMRC’s systems. For most people, moving to a full cloud accounting platform is more practical than maintaining a spreadsheet plus bridging software.
What happens if I miss a quarterly MTD submission?
HMRC uses a points-based penalty system for late submissions. For quarterly obligations, once you reach the penalty threshold, a £200 penalty can apply. HMRC has confirmed there are no penalty points for missed quarterly updates in the 2026/27 tax year for the first MTD wave, but you still need to keep digital records and complete the required year-end filing.
Does QuickBooks automatically submit my quarterly updates to HMRC?
No. QuickBooks can prepare and submit updates through compatible software, but you or your accountant should review and approve the figures before anything is sent. That review step is important because you remain responsible for making sure your records are accurate.
Will my accountant still need to do anything if I use QuickBooks?
Yes. QuickBooks handles much of the record-keeping and submission process, but your accountant still plays an important role in reviewing categorisation, advising on allowable expenses, tax planning, and preparing the final tax return.
I am a landlord with only one rental property. Do MTD rules still apply?
Yes, if your qualifying income exceeds the relevant threshold. The rules are based on total qualifying income, not the number of properties. If you also have self-employment income, that is combined with property income to test whether you are in scope.
Get ready for MTD with Asmat & Co
MTD for Income Tax is now live for the first group of sole traders and landlords. If you are in scope and not yet using compatible software, now is the time to act. If you are likely to join from April 2027 or April 2028, preparing early will make the transition far easier.
At Asmat & Co, we make the move to QuickBooks straightforward. We handle the setup, training, ongoing support and submissions, so you can focus on running your business rather than worrying about compliance.
Book your QuickBooks setup consultation here
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
