Making Tax Digital for Income Tax
From 6 April 2026, Making Tax Digital for Income Tax became compulsory for sole traders and landlords with income over £50,000. The way you report your income to HMRC has changed. If this applies to you, it is time to make sure you are set up correctly.
The good news is that, with the right support in place, MTD is more straightforward than it sounds. We handle everything in the background: getting you registered, setting up the right software, managing your quarterly submissions and filing your year-end declaration. You carry on running your business.
Does MTD Apply to You?
MTD for Income Tax applies if you are self-employed (a sole trader) or a landlord, and your total qualifying income is above the relevant threshold.
| Threshold | Applies from | Who is affected |
|---|---|---|
| £50,000+ | April 2026 | Sole traders and landlords: mandatory now |
| £30,000+ | April 2027 | Expanded to more sole traders and landlords |
| £20,000+ | April 2028 | Near-universal for the self-employed |
Your income threshold is assessed against the figures on your most recent tax return. HMRC will not register you automatically. You or your bookkeeper need to sign up.
If you are both a sole trader and a landlord, your income from both sources is combined when assessing whether you meet the threshold.
What Changes Under MTD?
Instead of filing a single annual Self Assessment return, you will need to do three things:
Keep digital records: All income and expenses must be recorded using HMRC-compatible software. Spreadsheets and paper records no longer meet the requirement on their own.
Submit quarterly updates: Four times a year, a summary of your income and expenses is sent to HMRC through your software. The first deadline is 7 August 2026, covering 6 April to 5 July 2026.
File a year-end declaration: After the tax year ends, you submit a final declaration that brings everything together.
MTD does not change how much tax you pay, or the rules around what you can claim. It changes how and when you report. Think of it as a progress report every three months, rather than one large annual return.
A note on penalties: HMRC is not imposing penalties for late quarterly submissions during the first year (2026/27). That does not mean the deadlines can be ignored. Getting the right habits in place now makes everything easier going forward.
How We Help
We manage the entire MTD process so you do not have to think about it. Here is what that looks like in practice:
-
We guide you through the process of registering for MTD and make sure everything is in place before the deadlines. If you are unsure whether you are already registered, we can check.
-
We set you up with MTD-compatible software: Xero or QuickBooks, both of which we are certified to work with. If you are already using one of these, we connect to your existing account and take it from there. No upheaval, no new systems to figure out on your own.
-
We keep your records digital, accurate and up to date throughout the year, so that when a quarterly deadline comes around, everything is already in order.
-
We prepare and submit your quarterly updates to HMRC on time, every quarter. You do not need to do anything. We handle it and let you know when it is done.
-
At the end of the tax year, we bring everything together and file your final MTD declaration with HMRC. If you have other income to declare alongside your self-employment or property income, we make sure it is all included correctly.
A Note for Landlords
MTD for Income Tax applies to landlords as well as sole traders. If your rental income (combined with any self-employment income) exceeds the relevant threshold, you are in scope.
If you own multiple properties, you still only submit one set of quarterly updates for all UK property income combined. If you also have self-employment income, that is submitted separately, but we manage all of it for you as part of the same service.
Xero and QuickBooks Partners
We are a Xero Certified Partner and Adviser, and a QuickBooks Partner. That means we know these platforms properly and can set you up, configure your account for MTD compliance, and manage everything on your behalf.
If you are already using Xero or QuickBooks, we can connect directly to your account and work within it. If you are not yet using cloud accounting software, we will recommend the right option for your situation and get you up and running.
Not Sure Whether MTD Applies to You?
Start with a free 45-minute consultation. We will look at your situation, tell you exactly what applies to you, and explain what needs to happen next. No obligation, no pressure. Just a straightforward conversation.