What is Making Tax Digital?
Making Tax Digital (MTD) is a government initiative to modernise the UK tax system and reduce errors in tax reporting. The core idea is simple: instead of filing a single annual Self-Assessment return, you keep digital records throughout the year and send regular updates to HMRC using compatible software.
MTD for Income Tax Self-Assessment (ITSA) builds on the successful rollout of MTD for VAT, which began in April 2019. In December 2022, the government confirmed that MTD for Income Tax would be extended to self-employed individuals and landlords.
The goal: fewer errors, less paperwork, and a clearer, more accurate picture of your tax position throughout the year
Key Dates
MTD for Income Tax is being introduced in phases, based on your gross qualifying income (total income from self-employment and/or property, before expenses):
| Start Date | Who is Affected |
|---|---|
|
6 April 2026 |
Self-employed individuals and landlords with qualifying income over £50,000 in 2024/25 |
|
6 April 2027 |
Self-employed individuals and landlords with qualifying income over £30,000 in 2025/26 |
|
6 April 2028 |
Self-employed individuals and landlords with qualifying income over £20,000 in 2026/27 |
Does This Apply to You?
You will need to use MTD for Income Tax from 6 April 2026 if all of the following apply:
- You are an individual registered for Self-Assessment
- You receive income from self-employment, property, or both
- Your qualifying income exceeded £50,000 in the 2024/25 tax year
Your qualifying income is your total income from self-employment and property only. Income from employment (PAYE), partnerships, dividends, or pensions does not count towards this threshold.
How does HMRC assess your qualifying income?
HMRC will look at the Self-Assessment tax return you submitted for the previous tax year. For example, to determine whether you must join MTD from April 2026, HMRC will review your 2024/25 tax return (the one submitted by 31 January 2026).
What if you become self-employed or a landlord after 6 April 2026?
You will not need to join MTD until after you have submitted your first Self-Assessment tax return. However, you can choose to sign up voluntarily at any time before that.
What Does MTD Mean in Practice?
MTD replaces the current once-a-year reporting process with a more regular, digital approach. Here is what changes:
- Digital record keeping: All business income and expenses must be recorded digitally, using HMRC-compatible software or a spreadsheet with ‘bridging software’.
- Quarterly updates: A summary of your income and expenses must be submitted to HMRC every three months.
- Final declaration: At the end of the tax year, you confirm your total taxable income, replacing the current Self-Assessment tax return.
The benefits of this approach include:
- A reduced risk of errors and unexpected tax bills
- A clearer, more up-to-date view of your tax position throughout the year
- Less time spent pulling everything together at year end
- HMRC being better placed to tailor support and guidance to your circumstances
What You Need to Do
For the 2025/26 tax year, there is no immediate change, please continue to send us your accounting records as usual so we can prepare and submit your Self-Assessment return by 31 January 2027.
Once MTD applies to you, there are four key steps:
1. Use MTD-compatible software. We use MTD compliant software in-house and will manage submissions on your behalf. This means you do not have to purchase any software thereby saving you some money.
2. Keep digital records. All business income and expenses must be recorded digitally and kept up to date throughout the year.
3. Submit quarterly updates. A summary of your income and expenses must reach HMRC within one month of the end of each quarterly period. Late submissions may attract a penalty.
4. Submit a final end-of-year declaration. This replaces your current Self-Assessment return and confirms your total taxable income for the year.
The quarterly submission deadlines for the 2026/27 tax year are:
| Quarter | Period | Submission Deadline |
|---|---|---|
|
Q1 |
6 April 2026 – 5 July 2026 |
7 August 2026 |
|
Q2 |
6 July 2026 – 5 October 2026 |
7 November 2026 |
|
Q3 |
6 October 2026 – 5 January 2027 |
7 Febrauary 2027 |
|
Q4 |
6 January 2027 – 5 April 2027 |
7 May 2027 |
A Note on Fees
MTD will increase the volume of reporting throughout the year. As a result, there is likely to be an increase in our fees to reflect the additional work involved. We will discuss this with you individually and provide clear guidance on what to expect before any changes take effect.
Questions or Concerns?
We are here to guide you through every step of the MTD transition. If you have any questions about how these changes affect you or would like to discuss software options and next steps, please do not hesitate to get in touch.