For years, spreadsheets have been the quiet backbone of self-employment in the UK. Simple, flexible and familiar, they worked well enough for the annual Self Assessment. But Making Tax Digital for Income Tax is going to change the rules of the game, not just how often sole traders report, but how closely HMRC can examine their records.
Under MTD, compliance is no longer a once-a-year event. Quarterly submissions mean your numbers are being viewed, assessed and cross-checked far more frequently. And that’s where many sole traders are about to run into trouble, because spreadsheets were never designed to create a robust digital audit trail.
This is why choosing the right MTD compatible software for sole traders is less about “submission success” and more about defensible data.
What an HMRC-proof digital audit trail actually looks like
An audit trail is not just a list of transactions. It’s the story behind the numbers.
For sole traders, that means:
- Every income entry tied to a real transaction
- Expenses categorised correctly from the outset, not fixed later
- Clear separation between personal and business use
- Consistency quarter-to-quarter, meeting making tax digital deadlines
- Adjustments tracked, not overwritten
This level of structure is extremely difficult to maintain in spreadsheets once quarterly reporting begins. It requires systems designed for ongoing compliance, which is exactly what modern MTD software for sole traders is meant to provide.
Why spreadsheets break under MTD scrutiny
Spreadsheets are static. They rely entirely on manual discipline: correct formulas, consistent categories, no accidental overwrites, and clean links between income, expenses and totals. In reality, they are fragile.
A spreadsheet can show totals, but it rarely shows how those totals were built in a way that stands up to scrutiny. If HMRC queries a figure, “because that’s what the spreadsheet said at the time” is not enough.
This is where many sole traders misunderstand MTD. The challenge is not sending data to HMRC — it’s proving that the data is correct.
How RentalBux approaches MTD differently
RentalBux was built by property accountants who deal daily with HMRC enquiries, not just submissions. That background shows in how the platform handles digital records.
Rather than retrofitting MTD onto basic bookkeeping, RentalBux:
- Uses pre-built charts of accounts aligned with UK tax reporting
- Structures income and expenses from day one
- Maintains a clean digital audit trail automatically
- Produces data that accountants can actually rely on
For sole traders, this means fewer corrections, fewer questions, and far less risk as MTD becomes mandatory. It also means that when quarterly submissions are made, the numbers are consistent, explainable and defensible.
This is exactly what good MTD software for sole traders should do — reduce exposure, not just save time.
Conclusion: Preparing now means fewer problems later
MTD for Income Tax becomes mandatory for sole traders from April 2026, but waiting until the last minute is a mistake. Systems need time to bed in, especially when moving away from spreadsheets.
The transition from spreadsheets to proper MTD software for sole traders is not about complexity, it’s about control. Control over your numbers, your reporting, and your exposure to HMRC scrutiny.
Spreadsheets helped sole traders survive the old system. They will not protect them under the new one.
