When HMRC talks about quarterly updates, many sole traders hear a dangerous message: “I only need to look at my numbers four times a year.”
That assumption is exactly why so many will struggle when Making Tax Digital for Income Tax for Sole Traders becomes mandatory from April 2026.
Quarterly submissions may be the reporting requirement, but compliance is built or broken by what happens every single day in between.
Why Quarterly Bookkeeping Alone Will Fail Under MTD
Under Making Tax Digital for Income Tax (MTD ITSA), sole traders with qualifying income over £50,000 will need to submit:
- Quarterly updates of income and expenses, and
- A final declaration replacing the traditional Self Assessment return
Starting April 2026.
Trying to reconstruct three months of financial activity just before each deadline creates the same problems HMRC is trying to eliminate:
- Missing or duplicated expenses
- Incorrect categorisation
- Inconsistent figures across submissions
- Increased reliance on estimates
In an MTD environment, those errors don’t stay hidden until January — they compound quarter after quarter.
The Real Risk: Inconsistent Data, Not Missed Deadlines
HMRC’s systems are designed to flag inconsistencies across submissions. If Q1, Q2 and Q3 tell slightly different stories, it raises questions, even if deadlines are met.
That’s why Making Tax Digital for Income Tax for Sole Traders isn’t just a compliance shift; it’s a data-quality shift.
Sole traders who treat bookkeeping as a quarterly chore will find themselves:
- Reworking past submissions
- Correcting figures under pressure
- Paying accountants more to “fix” rushed records
- Losing confidence in their own numbers
Daily Digital Records Are the Only Sustainable Approach
MTD works best when records are:
- Captured at the point of transaction
- Categorised consistently
- Aligned to HMRC’s MTD requirements from day one
This is where purpose-built MTD software for Sole Traders makes the difference, not as a filing tool, but as an everyday financial system.
How RentalBux Solves the Daily-Record Problem
RentalBux is designed for sole traders who need clarity, not complexity.
Instead of scrambling every quarter, users maintain live, HMRC-ready records throughout the year.
Key features include:
Digital income and expense tracking – Every transaction is recorded digitally, removing the need to rebuild accounts later.
Pre-built, MTD-aligned chart of accounts – Categories are already mapped to HMRC requirements, reducing the risk of misclassification.
Receipt capture and attachment – Expenses are backed by evidence — no more searching emails or bank statements months later.
Real-time visibility – Sole traders can see profitability, costs, and tax position at any point, not just at quarter end.
This approach turns quarterly updates into a submission task, not a bookkeeping panic.
Better Records Mean Better Decisions, Not Just Compliance
One overlooked benefit of daily digital records is decision-making.
When records are always up to date, sole traders can:
- Spot rising costs early
- Understand seasonal income patterns
- Plan for tax liabilities with fewer surprises
- Avoid cash-flow shocks caused by underestimated payments
MTD may be driven by compliance, but the businesses that benefit most are the ones using the data continuously.
Conclusion
HMRC’s direction is clear. The era of annual bookkeeping catch-ups is ending.
Sole traders who treat MTD as a quarterly admin task will struggle. Those who adopt daily digital record-keeping will find compliance simpler, cheaper, and far less stressful.
The smartest move isn’t waiting for April 2026 — it’s building the right habits now, with tools designed to support them.