New digital era as curtain to come down on traditional annual tax return
Azets has become the first accountancy firm in the UK to submit a Making Tax Digital (MTD) for Income Tax quarterly update for a landlord via Xero.
*As a top 10 UK accounting and advisory firm, we are working collaboratively with HMRC and the global small business platform, Xero, during the testing phase of this new compliance requirement prior to the public beta programme.
MTD requires individuals and businesses to keep digital records, use MTD-compatible software and submit updates every quarter, as well as a final declaration, bringing the tax system closer to real-time.
It 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.
From April 2026, landlords, sole traders and the self-employed with qualifying income above £50,000 will have to comply with MTD for Income Tax.
“This is a ground-breaking first for the accountancy sector in the UK,” said Azets’ UK Chief Executive Peter Gallanagh.
“Our sector-first participation fires the starting gun on a new era for digital compliance for sole traders, landlords and the self-employed who meet the qualifying income criteria. For many, it will be the first time they have real-time digital information on their taxes, allowing them to better plan for the future.”
Luke Quince, UK Head of Digital Delivery at Azets, said: “This is a major milestone as part of the countdown to the compliance deadline of MTD for Income Tax. As Xero’s National Firm of the Year for the last two years and through our strategic partnership with Xero, this signifies our commitment to our clients, ensuring that Azets’ clients will always be using the best in class and progressive technology.”
Praveen Gupta, UK Head of Tax at Azets, said: “MTD is one of the biggest tax changes since the introduction of Self Assessment, and will be a significant change for taxpayers. This signals a new digital era, bringing the curtain down on the traditional annual tax return and hopefully the end of the last-minute scramble for millions of taxpayers.”
Kate Hayward, UK Managing Director of Xero, said: “For many small businesses, sole traders and landlords, MTD for Income Tax will be a big shift and they’ll be looking to accountants and bookkeepers for help. By getting ahead of the curve and using technology to its full potential, Azets is leading the way - getting clients set-up for the future and ready for the next wave of MTD.”
There are three phases to the MTD introduction:
- Sole traders and landlords with a qualifying income of over £50,000 for the 2024-25 tax year will fall into scope for MTD from 6 April next year.
- From April 2027, those with a qualifying income of £30,000 will fall into scope.
- From April 2028, those with qualifying income over £20,000 will become part of the initiative.
Earlier this month Azets brought together a multidisciplinary team from across the firm for a focused two-day workshop to plan the firm’s approach to MTD for Income Tax.
Praveen said: “This investment of time, expertise and collaboration reflects our continued commitment to ensuring we are fully prepared to support our clients through the evolving tax landscape.
“With strong support from senior stakeholders, we’re focused on developing technology-led, cost-effective solutions that meet the needs of both our clients and our people. By taking a proactive, strategic approach now, we’re putting ourselves in the best position to deliver optimum outcomes as MTD for Income Tax becomes a reality.”
Making Tax Digital isn’t a new concept. All VAT-registered businesses have been required to use MTD software for recordkeeping and returns since April 2022.
Individuals can complete compliant returns themselves or do so through their accountants.
MTD for Income Tax 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.
We are here to help
At Azets, we’re here to help you navigate and prepare for these changes - ensuring you’re ready well ahead of April 2026.
We have created a dedicated area on our website with the latest information on MTD for Income Tax, and we will continue to provide updates as we progress through the timeline for introduction.
In the meantime, if you have any questions on how you can prepare, please get in touch with a member of our specialist Making Tax Digital team using the form below.