What is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) for Income Tax requires sole traders and landlords above an income threshold to keep digital records using HMRC-recognised software. They must send HMRC a summary of their income and expenses every quarter, then finalise the year with a tax return. It started on 6 April 2026 and is being extended in stages.
When does it apply to you?
From 6 April 2026: qualifying income over £50,000, based on the 2024–25 tax year.
From 6 April 2027: qualifying income over £30,000, based on the 2025–26 tax year.
From 6 April 2028: qualifying income over £20,000, based on the 2026–27 tax year.
Qualifying income is your combined gross self-employment and property income before expenses. HMRC guidance explains eligibility and exemptions.
How we help
Eligibility check: we work out your qualifying income and start date.
Software set-up: we help you choose and use an HMRC-recognised package.
Digital records: photograph receipts, connect your bank feed and let us handle the bookkeeping.
Quarterly updates: we check and submit your figures on time.
Year-end return: we finalise your return and review allowances and reliefs.
Ongoing insight: understand how your business is doing and what to set aside for tax.
Why start early
Clients who move to digital records before their start date get a calmer transition. Their tax planning is more accurate and they have a real-time view of their business. Quarterly figures also make it easier to plan cash flow and budget for tax.
MTD FAQs
01Does MTD for Income Tax apply to limited companies?+
No. It applies to sole traders and landlords. Limited companies already use Making Tax Digital for VAT if they are VAT- registered.
02Will I still need to file a tax return?+
Yes. Under MTD, you finalise each tax year with a tax return by 31 January, as now.
03Can I use spreadsheets?+
Yes, but only with HMRC-recognised bridging software. Most clients find cloud accounting software simpler, and we'll help you choose.
04What does it cost?+
MTD support is priced with your bookkeeping, from £25 a month, and your tax return, from £50 a year.