Are You Ready for the Upcoming UK Tax Changes?
If you’re a freelancer or sole trader in the UK, it’s time to get serious about Making Tax Digital (MTD). This government-led initiative is reshaping how self-employed professionals handle taxes – moving from paper and spreadsheets to fully digital tax reporting.
In this guide, we’ll explain what Making Tax Digital is, how it will impact freelancers, and how to stay compliant with HMRC in 2026 and beyond.
What Is Making Tax Digital (MTD)?
Making Tax Digital is HMRC’s digital transformation of the UK tax system. Its goal is to make tax filing easier, more accurate, and entirely online.
Instead of filing one annual tax return, freelancers and small business owners will need to:
- Keep digital financial records
- Submit quarterly income and expense reports
- Use MTD-compliant software to file tax data directly to HMRC
Who’s Affected by MTD?
- Already in effect: VAT-registered businesses with turnover above £85,000
- From April 2026: Self-employed freelancers and landlords earning over £50,000
- From April 2027: Earnings over £30,000
- Below £30k: Not yet mandatory, but digital readiness is encouraged
How Will Making Tax Digital Affect Freelancers?
Here’s what MTD will change for the self-employed:
✅ Goodbye Manual Record-Keeping
Freelancers will no longer be able to rely solely on spreadsheets or paper-based tracking. Digital records are now a legal requirement.
✅ Quarterly Tax Returns, Not Annual
Instead of one annual Self Assessment, you’ll need to submit four quarterly income and expense updates per tax year via MTD-compatible software.
✅ Real-Time Tax Insights
While it may seem like extra admin at first, MTD aims to reduce tax errors, minimise surprises, and give you real-time visibility over your tax position.
Key MTD Deadlines for Freelancers
| Milestone | Who It Affects | Date |
|---|---|---|
| MTD for VAT | VAT-registered businesses | In effect now |
| MTD for Income Tax | Self-employed over £50,000 | April 2026 |
| MTD for Income Tax | Self-employed over £30,000 | April 2027 |
| MTD for Corporation Tax | Limited companies | Post-2026 (TBC) |
How Freelancers Can Prepare for MTD
1. Choose MTD-Ready Accounting Software
Use HMRC-approved tools like FreeAgent, QuickBooks, Xero, or Sage to file tax returns and keep records.
2. Digitise Your Financial Records
Scan and upload receipts, log expenses as they happen, and say goodbye to shoebox bookkeeping.
3. Prepare for Quarterly Submissions
Add quarterly filing dates to your calendar and consider outsourcing bookkeeping to stay on track.
4. Get Professional Support
Don’t go it alone. An accountant or freelancer tax consultant can help ensure you’re MTD-compliant from day one.
How Solo Supports Freelancers with MTD
At Solo, we specialise in helping UK freelancers navigate the tax system with ease.
Here’s how we support you:
- ✅ Setup and training on MTD-compliant software
- ✅ Ongoing bookkeeping support for quarterly submissions
- ✅ Clear advice on freelancer tax responsibilities
- ✅ Proactive alerts, deadline reminders, and compliance checks
Whether you’re just starting or getting ready for 2026, we’re here to make the transition stress-free.
👉 Contact us for a free consultation about how MTD affects your freelance business.
Final Thoughts: Get Ahead of MTD and Stay Compliant
Making Tax Digital isn’t just another rule – it’s the future of tax in the UK. By embracing digital tools and preparing early, freelancers can reduce tax stress and avoid penalties.
Start now, and you’ll thank yourself later.
