Sole Traders & Landlords Under MTD: What Accountants Need to Prepare

MTD for Income Tax affects two main groups: sole traders and landlords. Each has different document requirements and common gaps.

Sole Traders: What You Need

Essential Documents - Trading income records (invoices, sales records) - Business expense receipts (categorised) - Bank statements for business accounts - Mileage logs (if claiming vehicle expenses) - Home office calculations (if applicable) - Capital allowances schedule

Common Gaps 1. **Mixed personal/business accounts** — clients who do not separate finances 2. **Paper receipts only** — no digital copies available 3. **Irregular record keeping** — months of catch-up needed each quarter 4. **No compatible software** — still using paper or basic spreadsheets

Landlords: What You Need

Essential Documents - Rental income records (tenancy agreements, rent received) - Property expense receipts (repairs, maintenance, insurance) - Mortgage interest statements - Agent statements (if using letting agents) - Capital improvements vs repairs classification

Common Gaps 1. **Multiple properties, no central record** — information scattered 2. **Letting agent statements not reconciled** — discrepancies between agent reports and bank 3. **Capital vs revenue confusion** — clients unsure what counts as an improvement 4. **Shared ownership complications** — joint landlords with different reporting needs

The Conversation to Have Now

For each affected client, you need to:

1. **Confirm their obligation** — "Based on your 2024/25 income of £X, you are now required to comply with MTD for Income Tax."

2. **Assess their setup** — "Do you currently use accounting software? Is it MTD-compatible?"

3. **Identify gaps** — "To submit your Q1 update by August, I need the following from you: [specific list]"

4. **Set expectations** — "You will receive quarterly reminders from us. Please respond within 7 days to avoid delays."

Systematising the Process

With 50+ clients in this position, you cannot have these conversations ad hoc. You need: - A checklist per client type (sole trader vs landlord) - A tracking system showing who has been contacted - Automated follow-ups for non-responders - A simple way for clients to submit documents

Getting Ahead

The accountants who are thriving under MTD are those who treated it as a process problem, not just a compliance problem. They built systems early, automated what they could, and focused their time on the clients who genuinely need help.

PracticeNudge was built specifically for this workflow. Track readiness, send reminders, collect documents — without the spreadsheet overhead.

Try it free →