Supporting your Making Tax Digital journey
Making Tax Digital for Income Tax
From April 2026, the way sole traders, the self‑employed and landlords report their income tax will begin to change. Making Tax Digital (MTD) is HMRC’s long‑term plan to modernise the UK tax system, and we are here to help you prepare with confidence.
What is Making Tax Digital?
Making Tax Digital (MTD) is a UK Government initiative requiring individuals and businesses to keep digital financial records and submit tax information through HMRC approved software.The aim is to reduce errors, improve accuracy, and make tax reporting more efficient. MTD includes both Making Tax Digital for VAT and Making Tax Digital for Income Tax (MTD for IT).
What does MTD for Income Tax involve?
Those in scope must:
1. Maintain digital records
Your income and expenses must be recorded using HMRC compatible software.
2. Submit quarterly updates
Every three months you'll need to send HMRC a digital summary of your business income and expenses.
3. Complete a Final Declaration
This replaces the traditional Self Assessment tax return and includes all income sources for the year.
Who will be affected and when?
MTD for Income Tax is being introduced in phases:
- From April 2026 – Individuals with qualifying income over £50,000
- From April 2027 – Individuals with qualifying income over £30,000
- From April 2028 – Individuals with qualifying income over £20,000
You will be in scope if you:
- Are registered for Self Assessment; and
- Earn income from self‑employment, property, or both that exceeds the relevant threshold.
The benefits of digital records for your business
As well as MTD for IT compliance, submitting records digitally offers benefits such:
- Reduced admin and paperwork
- More accurate, up‑to‑date financial information
- Greater visibility over business performance
- Smoother year‑end process
Cloud accounting offers simple, secure access to your financial information whenever you need it.
MTD for Income Tax is a significant change, but our team is on hand to make the transition smooth and compliant. As the UK’s #1 adviser for MTD for Income Tax, we help you choose the right software, implement it seamlessly and use digital tools with confidence.
Fraser Campbell, UK Head of Accounts & Business Advisory
Azets with you every step of the way
As the UK’s #1 adviser for MTD for Income Tax, our Digital Delivery team works with thousands of individuals and small businesses across the UK to ensure a smooth and compliant transition to MTD.
We provide:
- Software selection guidance: We help you choose the most suitable HMRC‑recognised accounting software for your needs.
- Full setup and migration support: Our specialists ensure your records and systems are configured correctly from the outset.
- Ongoing digital compliance: Quarterly updates, Final Declaration support, and ongoing advice as requirements evolve.
- Personalised, expert advice: From first steps to full adoption, we guide you through every stage of your MTD journey.
Related content
Stay up-to-date with our MTD for Income Tax Guide
To support you and help you prepare, we've created a clear and practical guide covering everything you need to know about MTD for Income Tax.
Leading MTD change
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.
Video | Understanding Making Tax Digital for Income Tax
In this video, the panel discusses what Making Tax Digital means for individuals and businesses.
Contact a specialist
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.
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.
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 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.
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.