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Making Tax Digital (MTD)
What you need to know.
As of April 2026, digital tax records will be a legal requirement for self employed and property income. We can check if Making Tax Digital is required for your business, and help make the transition stress-free.
What is Making Tax Digital?
Making Tax Digital (MTD) is a new UK government initiative designed to modernise how individuals and businesses record and report income to HMRC.
Described by the government as “the biggest change since HMRC launched Self Assessment more than 30 years ago,” MTD replaces the traditional annual tax return with a more efficient digital system.
Instead of submitting all your financial information once a year, you’ll record income and expenses digitally and send updates to HMRC every quarter, keeping your tax information accurate and up to date throughout the year.
Who will Making Tax Digital affect?
MTD will apply to most sole traders and landlords who are registered for Self Assessment and have qualifying income from self-employment or property.
Qualifying income means your total earnings from these sources before deducting any expenses or taxes. Other types of income, such as PAYE employment, partnerships, or dividends, aren’t included when calculating this amount.
If your qualifying income is above £20,000 a year, you’ll likely need to follow the new MTD rules.
When will your business have to go digital with tax?
Your start date for using Making Tax Digital depends on your level of qualifying income.
Those earning over £50,000 from self-employment or property will need to join the scheme from 6 April 2026.
If you earn more than £30,000, you’ll need to comply from 6 April 2027.
The government also plans to extend MTD further in the future, potentially including those with income above £20,000 once new legislation is introduced.
This phased approach is designed to give taxpayers time to prepare and adjust to the new digital system.
What are the requirements of Making Tax Digital?
Once MTD applies to you, you’ll need to meet a few key requirements.
You must use MTD-compatible software to record your income and expenses digitally, ensuring that your data is stored securely and submitted accurately to HMRC.
You’ll also be required to send quarterly updates throughout the tax year, instead of a single annual return, and then finalise your tax submission by 31 January each year.
These steps aim to make managing your taxes simpler, more accurate, and less stressful over time.
Need help
Making Tax digital?
MTD Compliant Software
Our highly trained team of financial experts will use their knowhow, along with Government recommended softwares to ensure that your business remains fully MTD-Compliant.
Stress Free Transition
We know that such a big change to the way that we are expected to record & report business finances is no fun for anyone – our team’s expertise and experience ensures a smooth transition.