Are you in? It’s your takings, not your profit
Add up everything clients and agencies paid you in the 2025/26 tax year – translation, proofreading, transcription, subtitling and interpreting fees, including payments from overseas clients converted into pounds – before taking off fees or costs. If the total (plus any rent from property you let) is over £30,000, MTD applies from 6 April 2027. Over £50,000 and you have been in since April 2026.
Over £50,000
Over £30,000
Over £20,000
planned
Your work in accountant language
What actually happens in your working life, what your accountant and HMRC call it, and what to do about it.
| What happens | Accountant calls it | What you do |
|---|---|---|
| An agency pays your monthly statement for 14 small jobs | Turnover – recorded when paid (cash basis) | Record the total when it arrives, and keep the agency’s remittance. |
| A German client pays you €900 | Turnover in sterling – foreign currency | Record the pounds that reached your account, or convert at a rate you use consistently. |
| Wise or PayPal takes a fee and a conversion margin | Allowable expense – bank and payment charges | Record the fee separately from the income. |
| You pay for your Trados or memoQ licence | Allowable expense – software | Keep the invoice. |
| You drive to a hospital for an interpreting booking | Travel – business mileage | Log the miles (45p a mile for the first 10,000) and keep parking receipts. |
| You pay another translator to proofread a job | Allowable expense – subcontractor costs | Keep their invoice. |
| You move money to your personal account | Drawings – not an expense | Fine to do, but it does not reduce your tax. |
| Every three months | Quarterly update | Your software sends HMRC your income and expense totals. |
| After 5 April | Final declaration | Confirm the year’s figures; tax is worked out and due by 31 January. |
What can a translator claim?
✓ Usually allowable
- CAT tools, subtitling and transcription software
- Dictionaries, glossaries and terminology databases
- Computer, headset and second monitor (business share)
- Professional body membership (for example ITI or CIOL) and accreditation fees
- Professional indemnity insurance
- Bank, PayPal and currency conversion fees
- Fees to proofreaders and other translators you subcontract
- Travel to interpreting assignments: mileage, fares and parking
- CPD in your existing language pairs and specialisms
- Home office – the flat rate or a fair share of bills
✗ Not allowable
- Holidays abroad to keep your language up, where they are mainly personal
- Smart clothes for court or conference interpreting that you could wear elsewhere
- Learning a brand new language from scratch
- Fines and penalties
- Money you take out for yourself (drawings)
Rules that matter for translators
Foreign clients and currency
If you live in the UK, payments from clients abroad are part of your UK self-employed income. Record everything in pounds. The simplest approach is the sterling amount that reached your bank; you can also use HMRC’s published exchange rates, as long as you are consistent.
Agency payments: record the gross
If an agency or marketplace deducts a commission before paying you, record the full fee as income and the commission as an expense. Keep the remittance statements – they show the gross figure for each job.
Interpreting for public bodies
Court, police and NHS interpreting is often booked through agencies. Unless you are on the payroll with tax deducted, those fees are self-employed income and count towards MTD.
Money held in foreign accounts
If you leave euros or dollars in a multi-currency account, the income still counts when you are paid, not when you convert it to pounds.
Worked example
Lucia, a Spanish–English translator and interpreter in Cardiff (illustrative example)
| Takings (turnover) | £37,200 |
| less CAT tool and software licences | −£620 |
| less Proofreading subcontractors | −£2,900 |
| less Interpreting travel and parking | −£1,800 |
| less Laptop and headset | −£1,300 |
| less Membership, insurance and CPD | −£870 |
| less Bank and currency conversion fees | −£410 |
| Profit | £29,300 |
| Income tax (estimate) | £3,346 |
| Class 4 National Insurance (estimate) | £1,004 |
| Total tax for the year | £4,350 |
| Put aside each month | £362 |
Estimate for 2026/27 using England, Wales & NI rates, assuming no other income. Scotland has different income tax bands.
What a quarterly update looks like
A typical quarter for a translator: download remittances from each agency, match foreign payments to the pounds that landed in your account, record transfer and conversion fees separately, and add your interpreting mileage and software receipts. Then submit from your software, or let your accountant do it. With lots of small jobs, a weekly check keeps quarter-end to minutes.
| Quarter | Period | Submit by |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 Aug |
| Q2 | 6 Jul – 5 Oct | 7 Nov |
| Q3 | 6 Oct – 5 Jan | 7 Feb |
| Q4 | 6 Jan – 5 Apr | 7 May |
| Final declaration | The whole tax year | 31 Jan following |
Quarterly updates are summaries – they don’t change when you pay. Tax is still due by 31 January (plus payments on account on 31 January and 31 July if they apply to you).
What will an accountant cost?
Typical monthly fees under MTD for Income Tax for: Sole trader, one business.
| Option | What you get | Per month |
|---|---|---|
| You do it yourself | MTD-compatible software. You keep the records and send the updates. | £0–£15up to £180 a year |
| Accountant files for you | You keep records in an app; they check them, send the 4 quarterly updates and the final declaration. | £30–£60about £360–£720 a year |
| Full service | They do the bookkeeping too – you share receipts and bank feeds, they handle the rest. | £60–£120about £720–£1,440 a year |
What pushes the price up: lots of transactions every month, or more than one income stream; records kept on paper rather than in an app; being VAT-registered; catching up on missed updates or late returns.
What a fixed-fee quote should include
- All 4 quarterly updates and the final declaration (your tax return)
- The MTD software licence – or whether you pay for it separately
- Whether they do the bookkeeping or only check what you’ve recorded
- A reminder before each deadline and an estimate of the tax to put aside
- Whether VAT (20%) is added on top – not every practice charges it
Accountancy fees for your business are an allowable expense, so they reduce your tax bill.
Indicative ranges from published UK price lists, checked October 2026. Not a quote – your fee depends on how many transactions you have, how tidy your records are and where you live.
Questions translators ask
Most of my clients are abroad. Does that income count?
Yes. If you are UK resident, income from overseas clients is part of your UK self-employed income and counts towards the MTD threshold.
Which exchange rate should I use?
Use the sterling amount you actually received, or HMRC’s published exchange rates. Whichever you choose, use it consistently.
An agency pays me net of its commission. What do I record?
Record the full fee as income and the commission as an expense. Your turnover – which decides MTD – is the full amount.
Can I claim my CAT tool licence?
Yes. Translation memory and subtitling software you use for paid work is an allowable expense.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax – GOV.UK
- Work out your qualifying income for Making Tax Digital for Income Tax – GOV.UK
- Send quarterly updates using Making Tax Digital for Income Tax – GOV.UK
- Find software that works with Making Tax Digital for Income Tax – GOV.UK
- Penalties for Making Tax Digital for Income Tax – GOV.UK
This guide is general information about HMRC’s Making Tax Digital rules as of 26 October 2026, not tax advice. MTD Match is an independent introduction service and is not affiliated with HMRC. Check gov.uk or speak to an accountant about your own situation.