Getting MTD done: Dom Littlewood meets sole traders on front line of tax changes

It’s the biggest change to the tax system in decades, so it’s not surprising that Making Tax Digital (MTD) for Income Tax makes some people nervous. For one eighth of sole traders it’s as scary as being chased by a shark, according to exclusive research for FreeAgent.

More than a third (39%) of the sole traders who took part in the same survey, conducted by Vitreous World, said they found getting ready for MTD for Income Tax more stressful than starting up their own business in the first place. Nearly a fifth said they have avoided opening emails about MTD.

That’s why FreeAgent has teamed up with renowned consumer champion Dom Littlewood to demystify the transition, as the first wave of sole traders and landlords moves to the new system from 6th April. For our Get MTD done with Dom series of films, the star of The One Show has been travelling up and down the country to meet real people who will be affected by the new rules - and find out how they’re getting ready to get MTD done.

Here’s what happened when he met a music producer who has his ear to the ground when it comes to MTD; a myth-busting accountant; a gardener tending the fresh shoots of a new business; and a magician who knows there’s no trick when it comes to taxes.

‘Some people are frightened - but I’m ready for MTD’

It’s a blustery Thursday morning when Dom arrives at Manchester’s legendary Vibe Recording Studio. New Order’s ‘Blue Monday’ - the biggest-selling 12” single of all time - was conceived in these very rooms, but the studio’s owner and producer-in-chief Dean Glover isn’t feeling down about MTD.

“I know it’s something a lot of people have been a bit unclear about,” Dean tells Dom. “Some of them are a bit frightened. But I feel like I’m nicely prepared for it. It’s not frightening me, because I’m ready for it.”

Under MTD for Income Tax, sole traders and landlords will have to use HMRC-recognised software to keep their accounts. As Dom says, “that means once-a-year spreadsheets and handwritten reports, well, they’re out. Digital is now in.”

A big part of the reason Dean feels so prepared for MTD is that he made the switch to digital record-keeping a little over a year ago, when he started using FreeAgent. The ability to link his bank account to the software - and watch his transactions flow seamlessly in - has been a game changer. And, even better, he gets FreeAgent for free* with his NatWest bank account.

“I wish I’d used it sooner,” says Dean. “I just had like an old spreadsheet before, which was not the easiest. As more and more things got added to the spreadsheet, it got harder to look after it and work it and import data into it. Whereas now, using FreeAgent, the data comes straight from my bank account. It’s just a lot more straightforward.” 

Not everyone is as up-to-speed as him, Dean acknowledges. He hears a lot of grumbles from fellow engineers and producers - but he tells them the shift to software could help them in the long run. Staying on top of your accounts year-round takes the sting out of doing your taxes, he says. “Tax doesn’t have to be that big, daunting event. FreeAgent means that I can remain independent and remain in control.”

‘MTD is coming whether you like it or not, so it’s best to get prepared’

A few miles east in Denton, the team at Bright Ideas Accountancy are working hard to get their clients ready for MTD for Income Tax. But New Business Manager Aaron Taylor still makes time to take a tea break with Dom… and demystify some common concerns.

“There is,” Aaron admits, “quite a lot of confusion going on.”

“Tell me about some of the misconceptions some of your clients might have about MTD,” Dom asks, as the kettle boils.

“The misconception is mainly people thinking that they’re going to pay tax quarterly, and that’s not the case,” says Aaron. “It’s just the submissions that are quarterly. The tax is still the same and done annually.”

Those potentially confusing quarterly submissions are another big change under MTD. Whereas sole traders and landlords are used to submitting one Self Assessment tax return to HMRC each year, now they will have to make one submission every three months - plus a final declaration. 

It might sound like a lot of extra work, but Aaron says FreeAgent - and a good accountant - can do “a lot of the heavy lifting”. If sole traders and landlords stay on top of adding their income and expenses to their software, they might even find there are advantages to the new way of working, he adds. 

“They’re going to have more visibility over the business and they’re not going to get a scary tax bill at the end of the year. They’ll know what they owe.”

At the end of the day, you will have to comply with MTD for Income Tax from 6th April 2026 if your qualifying income is over £50k. If your qualifying income is over £30k you’ll be included from 2027, and from 2028 if it’s over £20k - so now’s the time to get to grips with what it means for you.

“MTD is coming in April whether you like it or not,” Aaron says, “so it’s best to get on board now and get prepared.”

‘MTD is daunting because I don’t know enough about it’

From our MTD expert in Denton, Dom’s next stop brings him to a stormy garden in Rochdale where gardener Emma Cooper has not yet dug into what the new tax rules will mean for her. 

After previously working as a graphic designer, Emma followed her mum into life as a freelance gardener about a year ago. She currently keeps a record of her finances on a Google sheet and her receipts mostly in the glove box of her car - neither of which will work for MTD for Income Tax.

“I’ve got some bad news for you,” Dom tells her. “HMRC will not accept spreadsheets anymore. You’ll be a dinosaur!”

Though she doesn’t have to worry about MTD just yet - all new sole traders will have to file one old-school Self Assessment before finding out if they have to use the new system - Emma’s keen to sit down (on a cold and wet bench, no less!) to hear more from Dom about what’s coming.

“I am finding it daunting in a way,” she admits, “because I don’t know enough about it. I don’t know how I’m going to approach it - how I’m going to approach filling in my tax returns and my expenses. What’s the first port of call, basically?”

“Well actually that’s probably how most people feel at the moment because it is new,” reassures Dom, before giving Emma a quick crash course in how software like FreeAgent can help her get ready for MTD. 

“It will organise things for you,” he assures her. “I mean at the moment, your glove box way of doing things is not organised, is it? Let’s be honest.”

“It is so not organised,” Emma agrees, with a rueful smile. “I guess MTD could be a good thing. I think it’s gonna be better than the way I’m doing it.”

‘There’s no trick to your taxes - just stay on top of it’

After hopping on a train down to central London, Dom finds himself in the spellbinding surrounds of the Magic Circle Headquarters in London. He’s here to meet Chris Wall, a mind-reader and magician who’s been using FreeAgent to stay on top of his accounts since he started his own business six years ago.

“Would you say using FreeAgent saves you time?” says Dom.

“Absolutely, yeah. And that’s really important,” says Chris. “When you’re a sole trader, you’re doing everything. You’re the marketer, you’re doing the sales calls, you’re doing all of that work before you actually do the thing that you’re passionate about. FreeAgent has genuinely made my life so much easier because it’s really simple.”

“Do you think there’s any trick to getting MTD done?” asks Dom.

“I don’t think there’s any trick when it comes to tax or HMRC,” says Chris. “I think you’ve got to do things properly. But I think if you stay on top of it, make sure you’re doing things quarterly, it’ll be quite simple really.”

A fan of the support he gets from FreeAgent, Chris says taking the time to understand MTD has taken the stress out of it for him. “FreeAgent has helped me so much to demystify MTD. I think they’ve made it really simple through the blog posts they send out, the webinars they’ve done, and emails they send out as well,” he says.

“My advice to sole traders basically would be to read up on it, get a separate business bank account if you haven’t already… and understand that it’s actually not going to be too much hassle, I don’t think.”

‘People aren’t as worried about MTD as I thought they would be’

It’s been a whirlwind couple of days filming Get MTD done with Dom, but reflecting back on the conversations he’s had, Dom is pleasantly surprised. “I don’t think people are as worried about MTD as I thought they would be,” he says. “Initially I thought that a lot of people would probably be a bit scared of it because as soon as you mention anything to do with tax, people tend to put their guard up. 

“But the people I spoke to know it’s coming, there’s no way of avoiding it. And I think they are ready now to embrace it and just get MTD done.”

*You can get FreeAgent for free while you retain a business bank account with NatWest, Royal Bank of Scotland or Ulster Bank, or make at least one transaction a month through a Mettle bank account. Optional add-ons may be chargeable.