Making Tax Digital

Making Tax Digital (MTD) for Income Tax is a new mandatory way to report income from self-employment and property to HMRC. It will be introduced in phases from April 2026.

MTD for Income Tax will require customers, or their tax agent (this could be a bookkeeper or an accountant) to keep digital records and send quarterly updates of their income and expenses to HMRC, using MTD for Income Tax compatible software. Where customers have kept up-to-date digital records using MTD for Income Tax compatible software, the quarterly updates will be a simple check and send of a report generated by their software.

Who will legally have to use MTD for Income Tax and when they’ll have to start using the system depends on their MTD for Income Tax qualifying income included on their tax return. 

The qualifying income is the gross income (before expenses and tax are deducted) that sole traders and landlords receive in a tax year from self-employment and property combined. 

Deadline dates

Customers, or their tax agent will need to use MTD for Income Tax: 

• from 6 April 2026, if their gross income from these sources totals over £50,000 

• from 6 April 2027, if their gross income from these sources totals over £30,000 

• from 6 April 2028, if their gross income from these sources is over £20,000. 

HMRC will use the qualifying income included on your most recent tax return to identify if you will have to start using MTD for Income Tax. For example, customers who have to use MTD for Income Tax from 6 April 2026 will be identified based on their 2024 to 2025 tax return (which has to be submitted by 31 January 2026

The transition to Making Tax Digital (MTD) represents a significant shift in how businesses approach tax reporting and compliance in the UK. As part of this initiative, it is essential for companies to adopt efficient digital solutions that ensure accurate record-keeping and timely submission of tax returns. Our professional team is dedicated to providing guidance throughout this process, ensuring that the business can navigate the complexities of MTD with confidence. By leveraging advanced technology, we can streamline your accounting practices, minimizing the risk of errors and enhancing overall transparency. Adopting MTD not only ensures compliance but can also lead to improved financial management for your business. All the software we use is MTD compliant.