Making Tax Digital for Income Tax: It’s Here…

Making Tax Digital for Income Tax (MTD IT) is one of the most significant changes to the UK tax system in recent years. HM Revenue & Customs (HMRC) is continuing its programme to modernise tax administration, and for many self-employed individuals and landlords, new digital reporting requirements came into effect from 6 April 2026.

What is Making Tax Digital for Income Tax?

MTD IT will replace the traditional annual tax return for many taxpayers. Under the new system, affected individuals will be required to maintain digital records and submit tax information to HMRC using compatible software on a quarterly basis, with a final annual return.

The objective, according to HMRC, is to improve accuracy, reduce errors and help taxpayers keep track of their tax obligations more effectively.

Who Will Be Affected?

From April 2026, MTD IT will apply to self-employed individuals and landlords with total qualifying income over £50,000 per year. From April 2027, the threshold will reduce to £30,000.

Qualifying income refers to the total gross income received from self-employment and property rental activities, before expenses are deducted.

If your 2024/25 qualifying income exceeded the threshold, you need to comply with the new digital reporting requirements, from 6 April 2026. The first MTD IT return, for the quarter to 5 July 2026, is/was (depending when you are reading this) due by 7 August 2026.

From 5 April 2027, those with qualifying income in excess of £30,000 in the 2025/26 tax year will be required to register and comply.

What Will Change?

Taxpayers have previously been required to submit a self-assessment tax return annually. Under MTD IT, affected taxpayers will instead be required to:

• Keep digital records of income and expenses.
• Use HMRC-compatible software.
• Submit quarterly updates to HMRC.
• Complete an end-of-year finalisation process to confirm taxable profits and claim any adjustments or allowances.

Although the amount of tax you pay will not change solely because of MTD and, at this point in time, there is no acceleration of payment dates, the way information is reported to HMRC is, as you can see, significantly different.

How We Can Help?

Our team is helping clients with the transition to MTD IT by:

• Assessing whether the new rules will apply to you.
• Providing fully integrated software, approved by HMRC
• Assisting with digital record keeping, including transaction processing if required.
• Ensuring you remain fully compliant with HMRC requirements.

Particularly is you have not previously been required to register for VAT (where MTD has applied for several years) MTD for IT represents a major shift in your bookkeeping and accounting obligations, but, with the right preparation and support, the transition can be straightforward and painless. If VAT registered these retuens impose additional obligations, particularly if your VAT return quartes do not coincide - i.e., if you VAT return quarte;py dates are other than 30 June, 30 Septrember, 31 December and 31 March, as many are.

If you are self-employed or own rental properties and would like advice on MTD IT compliance, please get in touch, by email to nigelmoyseylimited@gmail.com. We would be delighted to help you understand your obligations, select the right software and systems and ensure you do not contravene HMRC’s requirements.