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Making Tax Digital for Income Tax
From April 2026 changes are coming to how you report your self-employed income.
Will MTD IT affect Me?
That depends on your income...
You must comply with MTD for Income Tax if you are a sole trader or landlord registered for Self Assessment and your combined gross income from self-employment and/or UK property exceeds £50,000 for the 2024/25 tax year. The thresholds reduce to £30,000 from April 2027 and £20,000 from April 2028. Only self-employment and property income count; other income like PAYE, dividends, or savings interest is excluded.
What's Changing?
Quite alot!
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Quarterly Updates: Instead of one annual return, you submit four quarterly summaries of income and expenses using MTD-compatible software.
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Final Declaration: After the fourth quarterly update, submit a year-end digital tax return by 31 January following the tax year, which finalizes your tax liability.
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Digital Record-Keeping: All records must be kept digitally; paper records alone are insufficient.
How Should I Prepare?
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Sign up for MTD via HMRC’s online service.
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Choose compatible software or bridging tools.
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Start keeping digital records from the beginning of your accounting period.
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Submit quarterly updates and review them before sending.
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Submit the Final Declaration by 31 January following the tax year.