Making Tax Digital for UK tradespeople
From April 2026, sole traders earning over £50,000 must keep digital records and file quarterly updates to HMRC. Here's what it means for window cleaners, plumbers, electricians and every other trade — and how to stay sorted without losing your evenings to admin.
The short version
If you're a sole trader and your gross income from self-employment plus property is over £50,000 in the 2024–25 tax year, you'll need to be on Making Tax Digital for Income Tax (MTD ITSA) from 6 April 2026. That means: digital records, HMRC-recognised software, and quarterly updates instead of one annual Self Assessment.
The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. So even if you're under £50k now, you'll likely be in scope soon enough.
Who actually has to do this?
MTD for Income Tax applies if all of the following are true:
- You're a sole trader or a landlord (or both)
- Your combined gross income from self-employment and property is above the threshold for that tax year
- You file a UK Self Assessment tax return for the relevant income
Limited companies are not in scope of MTD ITSA — they already file via Corporation Tax. If you've incorporated your window cleaning round into a Ltd, this isn't your problem yet (a separate MTD for Corporation Tax regime is on HMRC's roadmap but no firm date).
Partnerships are also outside MTD ITSA for now. Worth checking with your accountant if you're in a partnership setup.
What changes day-to-day
Honestly, less than the headlines suggest — if you set things up right. The big shifts are:
- Digital records. Every invoice and expense needs to live in HMRC-recognised software, not just on paper or in your head. The record needs to capture the date, amount, and category.
- Quarterly updates. Four times a year you submit a summary of your income and expenses. The deadline is one month and seven days after the quarter end. So for the quarter ending 5 July, the submission is due by 7 August.
- Final declaration. At the end of the tax year you submit a final declaration confirming the year's figures and any other income (interest, dividends, employed wages). This replaces your annual Self Assessment.
- Digital links. The data has to flow between systems digitally — no copy-pasting between a spreadsheet and your accounting software. This is why most tradespeople end up with a job app feeding into Xero or QuickBooks.
How Surehand + Xero keep you sorted
Surehand handles the front end: round management, scheduling, quotes, invoices, payments. Xero handles the back end: accounting, VAT, MTD submissions. The two talk to each other automatically.
Here's the loop:
- You finish a job in Surehand on the round and mark it complete
- Surehand creates the invoice and pushes it to Xero
- Customer pays by Direct Debit (via GoCardless), card, or bank transfer — Surehand records it and Xero reconciles it
- At quarter end, Xero submits your MTD update to HMRC. You approve it and you're done.
No re-typing, no end-of-quarter panic, no shoebox of receipts. The "digital link" rule is satisfied because every step is software-to-software.
What it costs vs. what it saves
Xero starts at around £16/month for a sole trader plan. Surehand is £15/month on the Essentials plan. So you're looking at roughly £30–£40/month all-in for software that covers MTD, quoting, invoicing, scheduling and payments.
Compare that to:
- £200 fine for hitting the missed-submission threshold
- An accountant rebuilding your records at the end of the year (typically £400–£800 if records are a mess)
- Hours every Sunday evening reconciling cash, bank transfers and a notebook
Common worries we hear
"I'm not great with computers." If you can use WhatsApp, you can use Surehand. Xero is similar. The whole point of these tools is that they hide the complicated bits.
"My accountant does my books." Great — they can keep doing them. Most accountants now insist on Xero or QuickBooks anyway, and Surehand sits in front of whichever they prefer. You're making their job easier.
"I'm under the threshold." Today, maybe. The threshold drops to £20,000 by April 2028 — that's almost everyone running a serious round. Better to set it up once and grow into it than scramble later.
What to do this month
- Check your 2024–25 gross income. Above £50k? You're in scope from April 2026.
- If you don't already use Xero or QuickBooks, now is the time to pick one. Xero pairs cleanly with Surehand.
- Move your customer round and invoicing into a job-management app like Surehand. The earlier you do this, the less catching up you'll have to do in March 2026.
- Talk to your accountant about whether they're MTD-ready and what they need from you.
Want a closer look at the integration? See how Surehand syncs to Xero, or start a free trial and have it set up before the deadline.
Frequently asked questions about MTD
Plain-English answers to the questions UK tradespeople actually ask.
- What is Making Tax Digital (MTD)?
- MTD is HMRC's programme to digitise tax record-keeping and reporting. Instead of one annual Self Assessment, you keep digital records throughout the year and send quarterly updates to HMRC using approved software. It started with VAT in 2019 and now extends to Income Tax for sole traders and landlords from April 2026.
- When does MTD for Income Tax start for tradespeople?
- From 6 April 2026, MTD for Income Tax (sometimes called MTD ITSA) becomes mandatory for sole traders and landlords with combined gross income above £50,000. The £30,000 threshold follows in April 2027, and £20,000 from April 2028. If you're under those thresholds you're not required to join — but you can voluntarily.
- Do I have to use software like Xero or QuickBooks?
- Yes. MTD requires HMRC-recognised software for both record-keeping and quarterly submissions. Spreadsheets work only if paired with bridging software. The simplest setup is a job-management app like Surehand that syncs invoices and payments straight into Xero — Xero is HMRC-recognised and handles the actual quarterly submission.
- How does Surehand help with MTD?
- Surehand syncs every invoice and payment to Xero automatically as you create them on the round. There's no manual export, no end-of-quarter scramble. Xero compiles the digital records HMRC needs and submits the quarterly update on your behalf. You stay focused on the work.
- What counts as a digital record?
- HMRC needs the date of each transaction, the amount, and the category (income or expense type). The records must be created, stored, and transferred digitally — no manual re-typing between systems. Surehand creates these records when you mark a job complete or take a payment, and the sync to Xero satisfies HMRC's 'digital link' rule.
- How often do I need to submit?
- Four quarterly updates per tax year, plus a final declaration after the tax year ends. The quarterly updates are summaries — not detailed line items. The deadline is one month and seven days after each quarter end (e.g. 7 August for the quarter ending 5 July).
- What if I miss a quarterly submission?
- HMRC has a points-based penalty system. You get a point for each missed submission. Hit the threshold (4 points for quarterly filers) and you face a £200 fine, plus further fines for each subsequent miss. Points reset after a clean run.
- I'm VAT-registered — is this on top of MTD for VAT?
- Yes. MTD for VAT and MTD for Income Tax are separate regimes that run in parallel. If you're VAT-registered and earn over £50k, you'll be doing both. Xero handles both from the same record set, so it's not double the work — just double the submissions.
- Can I keep using paper records or a spreadsheet?
- Not really. HMRC requires digital records and digital submissions, with a continuous 'digital link' between them. Paper notebooks won't satisfy that. A spreadsheet alone needs bridging software to submit. The path of least resistance is a digital tool like Surehand feeding into Xero or QuickBooks.
- What does Surehand cost compared to MTD penalties?
- Surehand starts at £15/month — about £180/year. A single missed-quarter penalty is £200. The maths writes itself, and that's before counting the time saved on admin.
Get your round MTD-ready before April 2026
Surehand syncs to Xero so your records are always digital, always linked, and always submission-ready. Try free for 30 days.
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