MTD for sole traders: a step-by-step guide for Brighton self-employed

By Accounting Solution · June 2026 · 7 min read

Making Tax Digital for Income Tax is now live. If you are self-employed in Brighton — a sole trader, freelancer, tradesperson or contractor — and your income exceeds £50,000, you are required to comply. Here is exactly what that means and what you need to do.

Who counts as a sole trader for MTD?

A sole trader is anyone running a business in their own name without a limited company structure. This includes:

• Freelancers and consultants billing clients directly
• Tradespeople (builders, plumbers, electricians, decorators) operating as self-employed
• Designers, writers, photographers and other creatives
• Personal trainers, tutors and other service providers
• Anyone registered for Self Assessment with self-employment income

If you trade through a limited company, MTD for Income Tax does not apply to your company — though it may apply to you personally if you also have property income or self-employment income outside the company above the threshold.

What is the income threshold?

MTD applies if your qualifying income — income from self-employment and/or property — exceeds:

• £50,000 from April 2026 (now live)
• £30,000 from April 2027
• £20,000 from April 2028

Qualifying income is your gross turnover, not your profit. If your invoices total £55,000 but your expenses bring profit down to £30,000, you are still in scope because gross income exceeds £50,000.

Step by step: what you need to do

Step 1: Check if you are in scope
Look at your last two years of Self Assessment returns. If your self-employment income (before expenses) exceeded £50,000 in either year, you are likely in scope now.

Step 2: Choose MTD-compatible software
You need software that can keep digital records and submit quarterly updates to HMRC. Xero, QuickBooks and FreeAgent are the main options. At Accounting Solution, software is included in our monthly fee.

Step 3: Register for MTD
You must sign up through HMRC’s MTD service. Your accountant can do this on your behalf. Do not leave this until your first quarterly deadline.

Step 4: Keep digital records from the start of your MTD period
From the date your MTD period begins, all income and expense records must be kept digitally. Paper records and manual spreadsheets alone no longer comply.

Step 5: Submit quarterly updates
Four times a year, your software (or your accountant) submits a summary of your income and expenses to HMRC. Deadlines are approximately one month after each quarter ends.

Step 6: Complete the final declaration
At year end, you confirm your total income from all sources. This replaces your Self Assessment tax return.

What about CIS contractors?

If you work in the construction industry under the Construction Industry Scheme (CIS), MTD applies to you in the same way as any other sole trader. Your gross income (before CIS deductions) counts toward the threshold. CIS deductions suffered are reclaimed in the usual way through your Self Assessment — or, under MTD, through your final declaration.

What if I have both self-employment and rental income?

Both sources count together toward the MTD threshold. If your self-employment income is £35,000 and your rental income is £20,000, your qualifying income is £55,000 and you are in scope. You will submit quarterly updates for each income source separately — one for your business, one for your property.

What does it cost to get set up?

At Accounting Solution, MTD setup (registration, software configuration, initial records migration) is included in our onboarding for new clients. For existing clients moving into MTD scope, we handle the transition as part of your ongoing service. There is a one-off £95 setup charge in year one to cover HMRC registration and software configuration — included in our standard packages.