Most Making Tax Digital problems aren't complicated — they're simple habits that slip. Here are the ones that catch sole traders out, and the easy fixes.
Qualifying income is your gross self-employment and property income — before expenses. It's easy to be over the £50,000 (then £30,000, then £20,000) threshold without realising. Check the gross figure, not your profit.
You need MTD-compatible software in place before your first quarterly deadline. Sorting it the night before is how mistakes happen. Decide early whether you'll use full software or a spreadsheet plus bridging software.
A spreadsheet is allowed for your records, but it can't submit to HMRC by itself — it needs bridging software. Knowing this upfront saves a nasty surprise at deadline time.
MTD rewards "little and often". If you only touch your books once a quarter, you'll spend hours catching up and you're more likely to miss expenses you could have claimed.
The dates — 7 Aug, 7 Nov, 7 Feb, 7 May — come around quickly, and HMRC runs a points-based penalty system for late updates. A reminder and a ready-made set of figures make this a non-issue.
Running everything through one account makes your records messy and your quarterly figures harder to trust. A separate business account (or at least a clear split) keeps it clean.
Based on official HMRC and gov.uk guidance. General information, not tax advice — check your own position with HMRC or an accountant.
The MTD Ready Kit helps keep your records tidy, gives you clear expense categories, prepares quarterly figures from the information you enter, and includes a reminder calendar and plain-English guides — so the common mistakes are much easier to avoid.
See the MTD Ready Kit — £29 Get the free checklist