Checked against GOV.UK on 14 August 2026
For sole traders the sharpest edge of MTD is multiple trades. The threshold test combines your businesses; the reporting keeps them apart.
If you have more than one sole trader business, for each source of self-employment income you must create separate digital records and send separate quarterly updates. HMRC's example is someone who is an electrician as well as a driving instructor: one set of records for each business, and separate quarterly updates for each.
Qualifying income adds all your self-employment and property income together, before expenses. Two businesses at £30,000 turnover each is £60,000 of qualifying income — over the £50,000 line, even though neither business is.
You can only get one penalty point per deadline. That applies even if you have more than one business and send more than one quarterly update late.
If you claimed the trading income allowance on your last tax return you still keep digital records of that self-employment income and include it in your quarterly updates, then claim the allowance in the tax return. HMRC's example: property income of £60,000 plus £1,900 of self-employment side income declared for 2024 to 2025 means keeping digital records of both in 2026 to 2027, because the self-employment income was above the trading allowance threshold.
You do not need digital records of self-employment income if both apply: it was below the trading income allowance threshold, and you did not declare it on your previous return.
HMRC will annualise a sole trader's qualifying income where it has the information — six months of trading in the first tax year is doubled to find the annual figure.
Your business name as used on your invoices, your business address, the nature of your business, and your business start date if it is within the last 2 tax years. With multiple businesses, check each one in the online service and add any that are missing.
General information about UK tax rules, not tax advice. Your own circumstances and HMRC's official guidance govern your position. If you are unsure, speak to an accountant or contact HMRC. Tax rules change — if this page is more than a few months old, check the GOV.UK pages linked above. Found an error? Email hello@getaxionlabs.com and we will correct it.