28/07/2026
A Guide to Making Tax Digital (MTD)
What is MTD?
MTD is a government initiative to remove all the paperwork linked to tax over the next few years. Using digital systems will minimise the risk of manual errors. This can save both time and money as well as reducing the chances of being subject to penalties for inaccurate tax reporting. It will also ensure that you have up to date and accurate information that could help you with future planning.
Who will need to sign up and when?
Sole Traders and Landlords with qualifying income:
Over £50,000 will need to comply with MTD from 6th April 2026
Over £30,000 will need to comply with MTD from 6th April 2027
Over £20,000 will need to comply with MTD from 6th April 2028
What is qualifying income?
Qualifying income is the combined turnover (before expenses are deducted) from Self-employment and property.
HMRC will use the most recent tax return to identify if you will need to sign up for MTD. MTD from 6th April 2026 income will be based on the 2024-25 tax return.
What digital information is needed?
The information needed are records of your income and expenses of your self-employment and property businesses. At a minimum the records should consist of dates, amounts and HMRC Category.
How often?
You will be required to submit quarterly updates; these will be summaries of your income and expenses. It will cover the following periods:
Quarter
Tax quarterly period 1 6th Apr – 5th Jul Calendar quarterly period 1st Apr – 30th Jun Filing deadline 7th Aug
Tax quarterly period 2 6th Jul – 5th Oct Calendar quarterly period 1st Jul – 30th Sep Filing deadline 7th Nov
Tax quarterly period 3 6th Oct – 5th Jan Calendar quarterly period 1st Oct – 31st Dec Filing deadline 7th Feb
Tax quarterly period 4 6th Jan – 5th Apr Calendar quarterly period 1st Jan – 31st Mar Filing deadline 7th May
A Final declaration must be made by the 31st January. This will be when you can add or amend information. Your Self-Assessment tax bill will then be generated for that year. There are currently no changes to the way tax liabilities are paid. The Final Declaration is equivalent to our usual year end check of your records and adjusting for items such as use of home as office and private proportions.
What’s next?
You will need to decide how much help you will need from us to complete your bookkeeping, whether this will be monthly or quarterly. Alternatively, you can input your own data and have us review your software quarterly or annually. We will contact each client separately to find out what level of support you need from us.
