MTD for Income Tax – Preparing for the next phase of digital reporting

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From April 2026, HM Revenue & Customs (HMRC) is rolling out Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA).

If you are a sole trader, landlord, or self-employed professional earning over £50,000 per year, you will soon receive a letter explaining your obligations under the new system.

What does MTD for Income Tax mean for you?

MTD is designed to modernise the tax system by reducing errors and increasing efficiency. Under the new rules, you will be required to:

Maintain digital records of income and expenses

Submit quarterly updates via HMRC-approved software

Complete an end-of-period statement (EOPS) and final declaration each year

Key dates and compliance requirements

April 2025 – HMRC begins issuing letters to affected taxpayers, based on 2023-24 tax returns
April 2026 – MTD becomes mandatory for those earning over £50,000

Steps to prepare

To ensure a smooth transition, consider taking the following actions now:

Assess your eligibility – You must comply if your annual self-employment or rental income exceeds £50,000.

Choose MTD-compatible software – Tax updates must be submitted using approved digital platforms. Our team can advise on the best software for your business.

Decide when to register –

Early adopters (2025-26 tax year) – Voluntary sign-up with access to support.

Mandatory adoption (2026-27 tax year) – Full compliance required from April 2026.

Check for exemptions – Some individuals may qualify for an exemption due to age, disability, or other exceptional circumstances. If you believe you may be eligible, we can assist with the application process.

How we can assist

Our experts can help you navigate MTD compliance by: