• What’s changing?
  Making Tax Digital (MTD) for Income Tax will require eligible self-employed individuals and landlords to keep digital records, use MTD-compatible software, and send quarterly updates of their income and expenses to HMRC.
• Who’s affected (from April 6, 2026)?
  Sole traders and landlords whose qualifying income (gross self-employment + property income before expenses) exceeds £50,000 per year.
• Why quarterly updates?
  Spreads the workload, brings reporting closer to real time, helps you stay on top of finances, and avoids the last-minute rush at filing time.
• How to get ready:
  Sign up now for HMRC’s free testing programme on GOV.UK (penalties are waived during testing), and/or ask your agent to register you. You’ll get hands-on experience and support before it becomes mandatory.
• Future thresholds:
  • From April 2027: those with qualifying income over £30,000
  • From April 2028: threshold falls further to £20,000
• Why it matters:
  Part of the government’s “Plan for Change” to modernise tax, boost economic growth, and help businesses work more efficiently. Early MTD for VAT adopters reported time savings and fewer errors, and HMRC expects similar benefits here.
• Scale of rollout:
  Around 780,000 taxpayers in April 2026, rising by another 970,000 in April 2027.

Feel free to reach out if you need more detail or guidance on signing up!

Making Tax Digital (MTD) is a digital initiative introduced by the UK government to modernize and streamline the tax system. It aims to make tax administration more efficient, accurate, and transparent by requiring businesses and individuals to maintain digital records and submit tax returns electronically.

Under MTD, businesses and self-employed individuals are required to use compatible accounting software or digital tools to keep their financial records. This includes recording income, expenses, and other relevant tax information in a digital format. The records must be maintained on a real-time basis, meaning they should be updated regularly and kept up-to-date.

Additionally, MTD mandates the submission of quarterly summary updates to HM Revenue and Customs (HMRC), which provide an overview of the business’s income and expenses. These updates are submitted electronically through the compatible software or tools.

At the end of the accounting period, businesses are still required to submit a final annual tax return summarizing their income and expenses. However, this submission must also be done electronically using the compatible software or tools.

The introduction of Making Tax Digital aims to simplify the tax process, reduce errors, and enhance compliance. By requiring digital record-keeping and regular updates, it enables more accurate and timely reporting, minimizing the likelihood of mistakes or discrepancies.

If you are in need of any assistance setting this up for your company, please get in touch!