Making Tax Digital (MTD)
Making Tax Digital for Income Tax is coming. If you’re a sole trader or landlord, you may be required to keep digital records and submit quarterly updates to HMRC. We provide full accounting support to get you compliant, keep you organised and remove the stress.
What is Making Tax Digital?
Making Tax Digital (MTD) is HMRC’s initiative to move tax reporting online for both VAT and Income Tax Self Assessment. It’s designed to make filing tax returns easier, more accurate, and more efficient for businesses and individuals alike.
What is MTD for Income Tax?
MTD for Income Tax is the next stage in HMRC’s digital rollout. From April 2026, anyone earning over £50,000 a year from self-employment or property rental will need to use MTD-compatible software to:
- Keep digital records
- Send quarterly updates of income and expenses to HMRC
- Complete and finalise the annual tax return through approved software
How does MTD change Income Tax?
The 3 key changes MTD for Income Tax will make to your financial management.
Digital record keeping
Under Making Tax Digital, income and expenses must be recorded using HMRC-approved software. Paper records and manual spreadsheets are no longer enough.
Quarterly submissions
Every three months, you’ll need to send HMRC a summary of your income and expenses. These updates are submitted electronically through MTD-compatible software.
Submitting your tax return
At the end of the tax year, you’ll still complete a final return. This means reviewing income and expenses, making any adjustments, and submitting the return through compliant software by 31 January.
How will MTD for Income Tax help me?
Here are some ways MTD for Income Tax will make your financial admin easier so you can get back to focusing on your business.
Save time and simplify
Keeping your records digitally means everything is in one place. It reduces repetitive admin and gives you a clearer picture of your finances throughout the year.
Fewer errors
Digital records and automated processes reduce the risk of mistakes and give you a more accurate view of your income and expenses.
Better security
Approved software uses tools like two-factor authentication and encryption, so your information is stored more safely than paper records or spreadsheets.
Easier to share info
Digital records can be shared instantly when needed, making it simpler to work with accountants or anyone else who helps manage your finances.
HMRC deadlines you can't miss
What does MTD for Income Tax mean for me?
Start preparing to keep your income and expenses digitally. Select your situation below to see what Making Tax Digital means for you.
From April 2026, self-employed people with income over £50,000 will need to follow MTD rules. Those earning over £30,000 will be included from April 2027.
You’ll need to:
- Record all business income and expenses digitally
- Send quarterly updates to HMRC using MTD-compatible software
- Submit your final return online by 31 January
QuickBooks is often the simplest option for sole traders, but Xero and Sage also work well.
We already work with all three platforms, so whether you’d like advice on which to choose, or prefer us to manage the submissions on your behalf, we can support you.
If you earn rental income above £50,000, MTD applies from April 2026. From April 2027, the threshold lowers to £30,000, and to £20,000 from April 2028.
You’ll need to:
- Keep records of rental income and expenses digitally
- Send quarterly updates to HMRC
- Complete your year-end return through compliant software
QuickBooks is user-friendly for rental income tracking, though Xero and Sage provide property-friendly tools as well.
We can set up the right software for you, explain how to record property income, and check that submissions go through accurately.
If you complete a Self Assessment return and your income is over the MTD thresholds, you’ll be included in the rollout:
- April 2026: over £50,000
- April 2027: over £30,000
- April 2028: over £20,000
You’ll need to:
- Keep your records digitally
- Submit quarterly updates
- Finalise your return via MTD-compatible software
For many individuals, QuickBooks offers the easiest setup, but Xero and Sage are equally accepted.
We’ll guide you through the process, from choosing software to ensuring your returns are filed correctly and on time.
MTD for Income Tax news, guidance and insights
Explore our latest articles to learn more about Making Tax Digital for Income Tax, how it affects you, and what you can do to prepare with confidence.
