Take the MTD for income tax quiz!

Correct answer: B – sole traders and landlords will be impacted by MTD for income tax.

Correct answer: A – Those earning £50k+ in annual gross trading or gross rental income will first be affected by MTD for income tax rule changes from April 2026.

Correct answer: C – total income before any tax allowances or business expenses have been deducted.

Correct answer: A – 6 April 2027, when sole traders and landlords with a gross trading or rental income of £30,000-£50,000 will be impacted. This will affect an additional 970,000 sole traders and landlords.

Correct answer: A – 6 April 2028, when sole traders and landlords with a gross trading or rental income of £20,000-£30,000 will need to comply with MTD for income tax rules. No announcement has yet been made about those earning up to £20,000.

Correct answer: C – Sole traders and landlords will need to keep regularly updated digital financial records of their income and expenses and report summaries to HMRC in a completely new way.

Correct answer: B or C. If you want to carry on using simple spreadsheets, you'll need "bridging software" that can report your figures digitally (ie online) to HMRC. Otherwise, you'll need MTD-compliant accounting software, which will take care of all of your recording and reporting requirements. Your current accounting software may well be compliant. You can check against HMRC's list of approved software.

Correct answer: B – quarterly. The MTD for income tax quarterly reporting dates are: 7 August (for 6 April to 5 July), 7 November (for 6 April to 5 October), 7 February (for 6 April to 5 January) and 7 May (for 6 January to 5 April). Sole traders and landlords will need to fully update their income and expense figures before the end of each quarter.

Correct answer: C – You may be granted an exemption if, for example, it's not practical for you to use software to keep digital records or submit them, because of your age, disability, location or religious beliefs. However, you must apply for an exemption, unless HMRC has already confirmed your exemption from Making Tax Digital for VAT.

Correct answer: C – After you've sent your fourth quarterly update, your software will show your self-employment and/or property income and expenses for the whole tax year. You can then adjust the data, claim allowances or reliefs, make tax and accounting adjustments, and make a final declaration to HMRC confirming all data is accurate and complete.

Correct answer: C – Your tax liability will not change because of MTD for income tax, only how you record (if you're not already using accounting software) and report your taxable income and tax expenses to HMRC.

Correct answer: C – There will be new late-filing and late-payment penalties for MTD for income tax. These will apply to all sole traders and landlords who are mandated into MTD for income tax. The existing penalty regime will continue to apply to those not yet required to comply with MTD for income tax.

Correct answer: B – The introduction of MTD for income tax will mean no more self assessment tax returns for millions of UK sole traders and landlords. However, you may still need to complete and file an annual self assessment tax return if you receive taxable income from, say, share dividend payments, capital gains or renting out a property overseas, as examples.

Correct answer: B – If you get the right accounting software, connect it to your credit card and bank accounts and regularly update your financial records with accurate figures, MTD for income tax will be pretty simple. The software will take care of much of the heavy lifting. You can also get support from an accountant if necessary, so it's nothing to worry about really.