Making Tax Digital for Income Tax: What You Need to Know

As part of our commitment to keeping you informed, Zohaib from our Tax team shares an important update about Making Tax Digital (MTD) for Income tax and how it may affect you.

MTD is the UK government’s initiative designed to make tax administration more effective, efficient, and easier for taxpayers through digital record-keeping and more frequent reporting.

While any change in tax process can feel daunting, we see this as a positive opportunity to improve the way your finances are managed – with better tools, fewer errors, and clearer visibility of your tax obligations.

Who Does MTD for Income Tax Apply To?

From April 2026, MTD for Income Tax Self Assessment (MTD for ITSA) will apply to:

• Sole traders and landlords
• With annual gross income over £50,000

From April 2027, it will also apply to those earning between £30,000 and £50,000.

Note: If your income is below £30,000, HMRC is still reviewing plans – so you may not need to follow MTD just yet.

What Will Be Required?

If you fall within the above thresholds, you’ll need to:

• Keep digital records of all income and expenses using compatible software
• Submit quarterly updates to HMRC, instead of a single annual tax return
• Submit a final declaration by 31^st January, to confirm your income and tax position

What Are the Benefits?

Done right, MTF for ITSA can actually make life easier:

• Fewer errors and improved accuracy
• Better financial visibility throughout the year
• Less last-minute stress at tax return time
• Paper-free, time-saving processes

We’re Here to Support You

Whether you’re already using digital accounting software or starting from scratch, we’re here to make sure your transition to MTD is smooth, compliant, and stress-free.

We’ll help you:

• Understand whether MTD applies to you
• Choose and setup the right accounting software for your business
• Keep digital records that stay compliant
• Manage your quarterly submissions with confidence

Not sure where to start? Let’s talk

If you have questions or want to know whether MTD affects you directly, please don’t hesitate to get in touch. We’re more than happy to walk you through it.

We are also running a free tax clinic on 15 July for all your tax-related queries. Find out more and register here.

Let’s embrace this change together – efficiently, confidently, and with the right support.