Making Tax Digital
Supporting your Making Tax Digital journey
Making Tax Digital
Making Tax Digital (MTD) is part of the government’s plans to make it easier for individuals and businesses to ensure their tax is correct and keep on top of their affairs.
Supporting your Making Tax Digital journey
Making Tax Digital (MTD) is part of the government’s plans to make it easier for individuals and businesses to ensure their tax is correct and keep on top of their affairs.
MTD requires individuals and businesses to:
- keep digital records
- use software that works with Making Tax Digital
- submit updates every quarter, bringing the tax system closer to real-time
MTD encompasses Making Tax Digital for VAT and Making Tax Digital for Income Tax.
Making Tax Digital for Income Tax
The way income tax self assessment returns are submitted is changing. We’re here to help you prepare.
Starting from April 2026, Making Tax Digital for Income Tax (MTD for IT) will impact sole traders, the self-employed and landlords with qualifying income over £50,000. The HMRC digitalisation initiative is aimed at making it easier for everyone to report their tax and do so correctly.
Our dedicated Digital Delivery team is here to support those impacted with selecting, implementing and setting up a compliant solution.
Get in touch for guidance on how to manage the change.
The criteria and requirements
MTD for IT will be introduced in three phases:
- from April 2026, for those with qualifying income over £50,000
- from April 2027, for those with qualifying income over £30,000
- from April 2028, for those with qualifying income over £20,000
Those falling into scope are required to maintain digital records and update HMRC each quarter, instead of the traditional annual tax return. Any return needs to be done using MTD-compatible software.
The benefits of maintaining digital records
As well as MTD for IT compliance, submitting records digitally offers benefits such as a reduced admin time, paperwork, more accurate financial records and the availability of real-time information about your finances. You can find out more about cloud accounting and the benefits to you and your business.
For small businesses, sole traders and landlords
From 6 April 2026, many small businesses, sole traders, and landlords earning over £50,000 will need to keep digital records and submit quarterly updates using MTD-compatible software.
We offer expert, personalised advice to help you choose the right MTD solution for your needs. We guide you through the setup process and ensure you stay compliant as requirements evolve.
With our support, you can:
- Select the most suitable MTD-recognised software for your business
- Get set up correctly and confidently from the outset
- Prepare and submit quarterly updates and your Final Declaration with ease
We’re here to make the transition to Making Tax Digital as straightforward as possible - so you can focus on running your business.
Frequently asked questions
Making Tax Digital (MTD) is a UK government initiative designed to modernise the tax system by requiring businesses and individuals to keep digital records and submit tax returns using compatible software. It aims to reduce errors, improve efficiency, and streamline tax reporting.
From 6 April 2026, Making Tax Digital (MTD) will be mandatory for sole traders, self-employed individuals and landlords with an annual income over £50,000. As of April 2027, this will roll out to incomes over £30,000, then £20,000 from April 2028. The final threshold was announced in the 2025 Spring Statement.
You must use Making Tax Digital for Income Tax if:
- You’re registered for Self-Assessment
- You earn from self-employment, property, or both
- To begin with, your income is over £50,000. This will increase scope to over £30,000 from April 2027, and then apply to income over £20,000 from April 2028.
Making Tax Digital for VAT applies to all VAT registered businesses.
MTD stands for Making Tax Digital. MTD is a UK government initiative to modernise tax reporting by requiring businesses and individuals to keep digital records and submit tax returns using compatible software.
Making Tax Digital (MTD) for Income Tax Timeline
From April 2026, sole traders, the self-employed and landlords with qualifying income of £50,000 or more must maintain digital records and submit quarterly updates to HMRC using compatible software, rather than submitting one annual return. Below are the key dates for MTD for Income Tax.
April 2025:
- Sole traders, the self-employed and landlords should start to plan ahead for MTD for Income Tax to allow enough time for migration, system setup and testing in order to be compliant by the deadline.
- Sole traders, the self-employed and landlords can voluntarily sign up for MTD for Income Tax ahead of the deadlines.
6 April 2026
MTD for Income Tax is mandated for sole traders, the self-employed and landlords with qualifying income of £50,000 or more.
Those impacted from next year should start to plan ahead for MTD for Income Tax to allow enough time for migration, system setup and testing in order to be compliant by the deadline.
7 August 2026
Q1 filing due for period 6 April to 5 July.
7 November 2026
Q2 filing due for period 6 April to 5 October.
31 January 2027
Self assessment due for the tax year 25/26, pre MTD mandation.
7 February 2027
Q3 filing due for period 6 April to 5 January.
6 April 2027
MTD for Income Tax is mandated for sole traders, the self-employed and landlords with qualifying income of £30,000 or more.
Those impacted from next year should start to plan ahead for MTD for Income Tax to allow enough time for migration, system setup and testing in order to be compliant by the deadline.
7 May 2027
Q4 filing due for period 6 April to 5 April 2027.
7 August 2027
Q1 filing due for period 6 April to 5 July.
7 November 2027
Q2 filing due for period 6 April to 5 October.
31 January 2028
Final declaration due for the tax year 26/27.
7 February 2028
Q3 filing due for period 6 April to 5 January.
6 April 2028
MTD for Income Tax is mandated for sole traders, the self-employed and landlords with qualifying income of
£20,000 or more.
£20,000 or more.
7 May 2028
Q4 filing due for period 6 April to 5 April.
7 August 2028
Q1 filing due for period 6 April to 5 July.
7 November 2028
Q2 filing due for period 6 April to 5 October.
31 January 2028
Final declaration due for the tax year 27/28.
With you every step of the way
MTD for IT represents a significant change in the way those impacted manage their tax affairs. At Azets, we have been working with clients to prepare for MTD by using and partnering with market-leading technology solutions, including Xero, that meet the requirements and legislation. We are also working with HMRC as part of their Public MTD Beta testing in order to test and refine the solutions that underpin our planned MTD Services. With our breadth of solutions and extensive expertise in supporting individuals and businesses on their digital journey, we can support you with adhering to the regulations.
Contact a specialist
Additional frequently asked questions
Each property owner will need to file their own quarterly submission for their share of income and costs. Please note, however, there is an easement which means you can elect to only report your share of income each quarter and catch up reporting of expenses in the final submission. This will make life easier for a lot of joint property owners.
The thresholds to decide what is in scope are based upon your share of revenue. If your share is above £50k then you will meet the MTD threshold from April 2026.
HMRC have confirmed that formal partnerships are not included in the scope of MTD for Income Tax currently, but they are likely to come in at some point.
No, qualifying income for MTD for Income Tax is that from self-employment and income from property only. Other income such as dividends, interest, pensions, etc. are not considered in the Qualifying Income Threshold test, but they would be accounted for in the digital tax return that will be completed in MTD compatible software.
We recognise that some individuals will prefer to keep maintaining records in Excel. While we do not recommend this practice given the substantially increased risk of errors in the quarterly MTD reporting regime, we will provide a range of services including using Excel.
If you would like us to complete and submit your return, we will be able to do that. We will support clients with the full MTD process and will have a number of options available to you regarding how much you would like to be involved in the process and how we can work together to ensure your compliance with MTD.
You can choose either the detailed pages you usually submit on your tax return today or high level three-line accounts showing revenue, costs and profit.
HMRC have said that this is a matter for individuals to decide. Some may wish to wait, and others will be more proactive and come in early. You can come into MTD for Income Tax ahead of your mandatory date. Many people are coming into the testing programme in 25/26 to gain first hand experience of what is involved and benefit from the enhanced support that is available in testing for taxpayers and their agents.
Yes, if you’re UK tax resident your qualifying income will include your:
• Self-employment income
• UK and foreign property income
• UK and foreign property income
We’re collaborating with MTD-compliant software vendors, including Xero, to ensure all systems we use are fully aligned with HMRC’s digital requirements. We will be launching a range of MTD services aimed at keeping your tax records and affairs up to date and compliant and will have a range of options available to you tailored to your needs.
Limited companies are not in scope for MTD for Income Tax.
Assuming that income generated from the limited company is the only source of income then you would remain outside scope for MTD. If you also had rental property income and sole trade income then you would need to review the thresholds.
There are no changes to the current payment of tax and no changes to the existing payment frequency. The only time a tax liability is generated is when the final declaration is submitted.
This is not part of the qualifying income for MTD and will remain reportable annually either in self-assessment or part of the final declaration process if you are in scope for MTD.
As well as MTD for Income Tax compliance, submitting records digitally offers benefits such as a reduced admin time, paperwork, more accurate financial records and the availability of real-time information about your finances. MTD for Income Tax also puts the information into the hands of your tax adviser more regularly – helping with forward tax planning and forecasts, and avoiding any January surprises on what the tax bill will be.
You can find out more about cloud accounting and the benefits to you and your business.
MTD-compatible software for Income Tax is software that supports the requirements of Making Tax Digital for Income Tax. HMRC have created a list of approved software for MTD for Income Tax.
HMRC have confirmed that they will write to taxpayers to confirm that they have met the qualifying income threshold and will be coming into MTD for IT. For April 2026, this will be based on the declared income for the 24/25 tax year, due by 31 January 2026. HMRC will then write to taxpayers from February 2026. This will be very short notice, so HMRC have started writing to taxpayers now, based on 23/24 tax returns, to inform them that they will likely be coming into MTD, they will then confirm once the 24/25 return comes in.