If you’re a sole trader earning over £50,000 there are new rules for reporting your income tax that will impact you considerably. Known as Making Tax Digital for Income Tax, the process may feel like a big change to how you report your income and expenditure but we’re here to guide you through what you need to consider. We explain clearly what needs to be done and support you with putting the right systems in place so you can feel confident about meeting the new MTD requirements.

What is Making Tax Digital and how does it impact sole traders?

Sole traders and landlords earning more than £50,000 will need to report their income and expenses to HMRC each quarter from April 2026 onwards. Reporting must be done online via approved software and as well as quarterly reporting, a final year-end report is also required.

There’s an upside to not managing MTD yourself

It’s tempting to think you’re saving money by doing your own bookkeeping and reporting to HMRC. After all, you’re capable, you understand your business, and logging expenses and income feels quite straightforward.

But there is a cost – your time. If you’re earning £50,000 plus, every hour you spend wrestling with MTD-compatible software, trying to reconcile transactions, or searching for a missing receipt, is an hour you’re not earning. If you invoice your time at £50 or even 100 per hour, managing MTD yourself is costing you hundreds of pounds. If you handle your books at night in your “free” time, that’s time you could be spending with your family and friends, relaxing or resetting ready for the next day.

As professionals with lots of experience of MTD, we understand the requirements and can save you money so you can get back to doing what you do best.

Outsource your bookkeeping and embrace more opportunities

If you decide to outsource your bookkeeping and MTD, there’s so much more you could be doing with your time.

For a start, whilst we’re managing your bookkeeping, you can chase that new client lead or develop a new product or service that could double your income. You could even be building the strategic partnerships that will transform your business. You may even find that you have the space to stop and think about ‘what’s next?’.

When you outsource to Hour Hands, our professional bookkeepers keep you compliant and we give you clarity over your financial position. We’ll show you where your money’s really going, which clients are profitable, if there are opportunities for tax deductions. All the information you need to be successful and to grow.

MTD is here to stay so outsource your bookkeeping today!

Making Tax Digital isn’t a one-off task, it’s an ongoing obligation to report accurately to HMRC with quarterly and annual deadlines and strict requirements.

The positive cost of outsourcing your bookkeeping

Let’s talk numbers. Our ‘Launch’ professional bookkeeping package starts at £400 per month increasing to £700 for more established businesses with multiple accounts.

Now compare that to:
● The potential late filing penalty of around £200+
● The potential penalty for errors that HMRC have said will be starting at £300 plus the possibility of missing tax deductions
● The time you’re spending on bookkeeping instead of earning (20-30 hours monthly at your hourly rate)

The mathematics is simple: professional bookkeeping from Hour Hands ultimately saves you money, makes you money and gives you real peace of mind as you know your MTD submissions are correct. You know your deadlines are handled. You know our experts are watching your numbers and will flag issues before they become problems.

Ready to find more time to spend on your business? Talk to Hour Hands

If you’re earning over £50,000 as a sole trader, you’ve already proved you can build a successful business. Making Tax Digital isn’t going away, and the risks of getting it wrong are too high to gamble on.

Give the Hour Hands team a call today and invest in stability, compliance, and your own peace of mind.