What is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords report to HMRC. Instead of one tax return a year, you keep your records in compatible software and send a short update every quarter, followed by a final declaration after the tax year.
Who has to join, and when?
- From 6 April 2026: qualifying income over £50,000
- From 6 April 2027: qualifying income over £30,000
- From 6 April 2028: qualifying income over £20,000
Qualifying income is your total income from self-employment and property, before expenses. It is worked out from your tax return for an earlier year, so check your figures now.
What you need to do
- Check whether your income is over the threshold.
- Choose MTD-compatible software, such as Xero or QuickBooks.
- Record income and expenses digitally throughout the year.
- Send quarterly updates to HMRC.
- Submit your final declaration by 31 January after the tax year.
How we can help
We set up the software, show you the simplest way to keep records, and send your quarterly updates and final declaration for you. MTD updates are available as a £20 a month add-on to our Sole Trader package.
This guide is general information, not advice for your situation. Contact us before acting on it.