Making Tax Digital (MTD) for Income Tax

What it means for you – and how we can help

As a small, friendly accountancy practice, we work closely with sole traders and landlords who want clear advice and practical support.

Making Tax Digital (MTD) for Income Tax is a significant change, but with the right systems and guidance in place it does not need to be complicated. We help clients understand what is required, set things up properly, and deal with HMRC on their behalf.

This page explains what MTD for Income Tax is, who it applies to, and how we can support you every step of the way.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax (also known as MTD for Income Tax Self Assessment – ITSA) is an HMRC initiative designed to modernise the tax system.

Under MTD, taxpayers will:

  • Keep digital accounting records
  • Submit quarterly updates of income and expenses to HMRC using approved software
  • Finalise their tax position after the end of the tax year

The aim is to reduce errors, improve accuracy, and help taxpayers stay more up to date with their tax affairs.

Who does MTD for Income Tax apply to?

MTD for Income Tax will apply to:

  • Sole traders and landlords
  • With total gross income (before expenses) from self-employment and/or property of:
    £50,000 or more from 6 April 2026
    £30,000 or more from 6 April 2027

If you have multiple businesses or rental properties, the income is added together to determine whether you meet the threshold.

HMRC has confirmed that other groups, such as general partnerships, will be brought into MTD at a later date.

How will MTD change the way you report tax?

Quarterly updates

Instead of reporting everything once a year, you will submit four quarterly updates during the tax year.

These updates:

  • Summarise your income and expenses
  • Do not calculate your tax bill
  • Do not change when you pay tax

Typical quarterly periods are:

  • 6 April – 5 July
  • 6 July – 5 October
  • 6 October – 5 January
  • 6 January – 5 April

End of Period Statement (EOPS)

After the end of the tax year, we will prepare an End of Period Statement for each business or property source.

This is where we:

  • Finalise your accounts
  • Apply accounting adjustments such as capital allowances
  • Confirm the final taxable figures

Final Declaration

You will still submit a Final Declaration each year to HMRC.

This includes:

  • All sources of income
  • Claims for allowances and reliefs
  • Confirmation of your final tax liability

This replaces the traditional Self Assessment tax return.

Digital record keeping

You will need to keep records of income and expenses in:

  • HMRC-approved accounting software, or
  • Spreadsheets connected to HMRC via compliant bridging software

Paper-only records will no longer meet HMRC requirements.

What software will you need?

MTD requires the use of HMRC-approved software.

Depending on your circumstances, this may include:

  • Cloud accounting software
  • Spreadsheets combined with bridging software

We’ll take care of choosing and setting up the software that works for you and your business.

What is not changing?

You will not pay tax quarterly under MTD (for now)

Existing tax payment deadlines remain the same

Our Service - We'll take care of everything from software to submission

How we help clients with MTD for Income Tax

As a small practice, we offer a personal, hands-on service rather than a one-size-fits-all approach.

We support our clients with:

  • Clear advice on whether MTD applies to you
  • Practical help choosing and setting up compliant software
  • Straightforward bookkeeping support if needed
  • Preparing and submitting quarterly updates to HMRC
  • Completing End of Period Statements and Final Declarations
  • Ongoing tax advice and support throughout the year

You will deal with people who understand your business and are easy to contact when you need help.

What should you do next?

If you are unsure whether MTD for Income Tax will affect you, or you want to prepare well in advance, we recommend speaking to us as early as possible.

Early planning helps:

  • Avoid last-minute stress
  • Reduce the risk of penalties
  • Put efficient systems in place

Speak to us about Making Tax Digital

If you are a sole trader or landlord looking for clear advice and a personal service, we would be happy to help.

Whether you are new to MTD for Income Tax or want an accountant to manage the process for you, we will explain everything in plain English and take care of the compliance.

This information is for general guidance only and does not constitute tax advice. Tax rules and HMRC guidance may change, and individual circumstances will vary.