Sole traders and landlords with income of £20,000 will be mandated to register for Making Tax Digital (MTD) for Income Tax from April 2028.

Under the changes, landlords and sole traders earning £20,000 will need to keep records of their income and expenditure digitally and send a quarterly summary of business and, or property income and expenses, and their end of year return.

‘In doing so they may incur significant transitional and continuing costs,’ a policy paper from HMRC stated.

‘Overall, HMRC estimates a transitional cost of £380m, and a net increase in the continuing costs of tax compliance of £101m for those businesses with income between £20,000 and £30,000,’ the paper stated.

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