What is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) for Income Tax is HMRC’s move towards a more real-time way of reporting self-employment and property income. Instead of a single annual Self Assessment return, those within scope will need to keep digital records and send HMRC quarterly updates throughout the year, followed by a final declaration after the tax year ends.
Who does it affect, and from when?
MTD for Income Tax is being phased in based on your gross income from self-employment and property combined, using the income reported for an earlier tax year to determine whether you fall within scope:
- From 6 April 2026: if your gross income is over £50,000
- From 6 April 2027: if your gross income is over £30,000
- From 6 April 2028: if your gross income is over £20,000
If you are below these thresholds for now, it is still worth understanding the rules early, as they may extend to lower income levels in future years.
What you will need to do
Once MTD applies to you, you will need to keep digital records of your business income and expenses using MTD-compatible software, send a quarterly update to HMRC summarising your figures, and submit a final declaration after the tax year end confirming your total tax position across all your income.
Quarterly deadlines to know
Under the standard reporting quarters, updates cover 6 April to 5 July, 6 July to 5 October, 6 October to 5 January, and 6 January to 5 April, with each update due roughly a month later, on 7 August, 7 November, 7 February and 7 May. Depending on your software, you may also be able to elect for calendar quarters instead, running from the start of each calendar quarter.
How MLA Chartered Accountants can help
We can confirm whether and when MTD will apply to you, help you choose and set up compatible software, and manage your quarterly submissions so nothing gets missed. Moving to digital record keeping ahead of your deadline makes the transition far smoother.