CHECKLIST
Making Tax Digital Readiness Checklist
About thirty five minutes. Most of it is finding out whether you are in scope, which is decided on a figure most people never check. Making Tax Digital for Income Tax replaces the annual return with four quarterly updates and a year-end declaration, and the first phase has already started.
- Five sections, fifteen checks, thirty five minutes
- The gross income test, and why profit has nothing to do with it
- All four deadlines, on both sets of quarter dates
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Who this checklist is for
Sole traders and landlords who need to know whether Making Tax Digital applies to them, from when, and what has to be working before the first quarterly update rather than after it.
You are not sure whether this applies to you yet
That is the first ten minutes of the list, and it turns on one figure. Qualifying income is gross income from self employment and property added together, before any allowances or expenses. Being under one threshold is not the same as being out, because the next phase is lower.
Your records get written up at the quarter end
That is the habit the rules are designed to end. The requirement is digital records created as transactions happen, categorised as you go, with digital links between systems. A spreadsheet still has a part to play, but only if bridging software carries the figures to HMRC without anybody retyping them.
You have software and assume that is the same as being ready
Two things catch people. Filing accounts and filing quarterly updates are different obligations, and not every package does both. And the software has to be authorised with HMRC before it can file anything, which is the step that fails at five to midnight rather than five weeks out.
FACTS
The mistake almost everybody makes
Looking at profit. A freelancer invoicing £64,000 and making £55,000 is in scope from April 2026. So is one invoicing £64,000 and making £12,000. Qualifying income is the gross figure before a single expense comes off, which is why a business with heavy costs and a modest profit can be brought in years before it expects to be.
15 checks
Five sections
35 minutes
Ten of them on scope alone
FACTS
Under a threshold is not the same as out
The tests are “over”, not “at”. Qualifying income of exactly £50,000 misses the first phase and clears the second, so that business joins in April 2027 rather than not at all. And each phase is measured on the tax year two years before it starts, so by the time it applies to you it was decided on figures you filed long ago.