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 keeps your records tidy, categorises expenses correctly, prepares your quarterly figures, and includes a reminder calendar and plain-English guides — so the common mistakes simply don't happen.
See the MTD Ready Kit — £29 Get the free checklist