Rachel Owens sells candles. She sets up at farmers’ markets around South Wales, maybe three Saturdays a month when the rain holds off, and brings home anywhere from 800 to 1200 pounds on a warm weekend. Card reader on the table, but most people hand over notes, 60 percent or so, and she writes receipts for nobody unless they specifically want one. Her books last year were a shoebox and a nightmare weekend in January matching bank lines to scribbled notes. The accountant sorted the Self Assessment, and then nothing happened until next January.
Owens brings in 35000 to 45000 gross, depending on Christmas, and that lands her in the April 2027 wave for Making Tax Digital. From that point, she will need MTD compatible software to keep digital records and submit quarterly updates to HMRC. The threshold drops to 20000 in April 2028, and the 50000 cohort starts next month in April 2026. Maybe 15 to 20 percent of market traders earning above 30000 have never opened accounting software, not even a spreadsheet with formulas, just paper ledgers and guesswork that will not talk to HMRC without bridging software. The UK has roughly 5.7 million private sector businesses now, 3.1 million of them sole proprietorships, and the Department for Business and Trade counted 138900 more sole traders at the start of 2025 than the year before. Three quarters of all UK businesses have no employees besides the owner. Most of them sit below the 90000 VAT threshold and have never filed anything digitally in their lives.
I stopped by a craft fair in a church hall near Bristol one February afternoon and talked to maybe a dozen people about how they track their money. Two of them had software, both Etsy sellers who needed it for the integration. Everyone else used notes or spreadsheets or their heads, and got someone to add it up at year’s end. One jewellery maker from Gloucester told me she thought MTD was a VAT thing. When I explained the income thresholds, she said she would probably just cut her prices or skip a few fairs to stay under 20000.
Owens buys wax and fragrance oils from five or six places, and some send invoices while others just take the bank transfer and hand over the goods. She pays pitch fees in cash to market organisers who tick her name off a clipboard and sometimes give her a slip of paper if she asks. The drives to those markets at least leave their own paper, a Chevron receipt on the card each time she fills the tank for the run across South Wales, even on a Saturday when nothing else from the day generates a record. December probably accounts for a third of her year, and January is dead. Her busy season and her dead season fall in the same HMRC quarter. The 2024 Small Business Survey had 65 percent of sole traders using record keeping software, up from 56 percent two years earlier. Paper still shows up in 57 percent of them, spreadsheets in 46 percent. Those percentages run over 100 because most people use two or three methods at once. Someone photographs receipts into an app but also stuffs the paper in a folder, or keeps a spreadsheet and a handwritten diary of which markets they worked.
David Cartwright sells vintage records at pop up markets around Manchester, setting up twice a month at different venues and taking maybe 400 to 700 pounds each time, depending on stock. He keeps a tin of cash for change, takes cards on a cheap Amazon terminal, and photographs receipts on his phone. The hire van he books for the bigger clearance runs is the one expense he never has to chase down. A car rental receipt prints at the counter and lands on the card statement on its own, more than the stock ever does for him. He makes around 25000 in a good year, which keeps him out of MTD until 2028. His stock comes from charity shops, car boots, house clearances, eBay, and most of it arrives without any paperwork at all. He asks for a receipt sometimes and gets a scribbled note, but usually there is nothing, just cash for records. When HMRC eventually wants digital evidence of his expenses, he has no idea how he will prove what he paid for boxes of LPs that came out of a garage in Stockport with nothing but a phone photo to document it.
MTD compatible software has to create digital records, store and correct them, and submit quarterly updates to HMRC through the API. You cannot just use a spreadsheet unless you connect it to bridging software that handles the submission to HMRC. HMRC itself is building a free tool for quarterly updates, though it will not have bank feeds or receipt scanning, or payment integrations. Zoho Books does MTD submissions for free, but cuts you off at 35000 turnover and expects you to know what you are doing. SumUp is building a free MTD tool that pulls from card transactions, which would help if card transactions were not still 40 percent of the total at most stalls. Clear Books has a free tier and no revenue cap, probably the closest thing to a free option for people who already understand bookkeeping.
HMRC runs the penalty system on points now. Every missed quarterly deadline adds one point to your account. At four points, you receive a 200 pound fine, plus 200 for each subsequent missed deadline after that. Two years of clean filing and the points reset to zero. If you sign up before you are legally required to, HMRC will not count late quarterly updates against you in year one.
Cash basis has been the default for sole traders since last April, and it simplifies some things. You record income when it actually arrives in your account and expenses when the money leaves. HMRC still expects you to have proof of what you spent if they ever ask. Bank statements cover anything paid electronically, from a car rental receipt to a supplier invoice, but cash leaves no trail. Buy stock with cash from your tin and sell it the same afternoon for cash, and there is no record anywhere.
Market organisers have not really thought about any of this from their vendors’ perspective. The Makers Market books pitches through a website, so vendors get a digital record of at least 25 or so events a month across the North West and Midlands. Smaller markets are still cash on the morning and a tick on a list, nothing on paper. An insurance broker who works with craft fair sellers reckoned maybe 30 percent of her clients are not even registered, just using the 1000 pound trading allowance.
Owens said she would probably hand everything to her accountant when MTD comes in, even though it will cost her a few hundred extra pounds a year. She was not angry about it. She said she had known for a while that something like this was coming and had been hoping it would take longer. The Saturday market in Cardiff charges 35 pounds for a pitch, and she has never gotten a receipt for it.
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