Making Tax Digital (MTD)

MTD for Income Tax is the next major step in HMRC’s digital transformation of the UK tax system. It moves many sole traders and landlords away from a single annual Self-Assessment submission and introduces a system of digital record-keeping and regular reporting using HMRC-compatible software.

See how Kingscott Dix can help transfer your accounting records to such a package on our ‘Accounting & Cloud Integration’ page.

What is MTD for Income Tax?

MTD for Income Tax (often referred to as MTD for ITSA) requires individuals with qualifying self-employment or property income to:

  • Keep digital records of income and expenses throughout the tax year, and
  • Submit four quarterly updates to HMRC using approved software.

You will still finalise your tax position each year and make tax payments in line with the usual deadlines (for example, 31 January). The quarterly updates sit alongside this annual process and give HMRC a more up-to-date view of your income and expenses during the year.

Who Will Need to Comply and When

The introduction of MTD for Income Tax is being phased in based on total self-employment and property income:

  • From 6 April 2026: Individuals with qualifying income over £50,000
  • From 6 April 2027: Individuals with qualifying income over £30,000
  • From 6 April 2028: Individuals with qualifying income over £20,000

These thresholds are based on total relevant income before expenses and apply to individuals with self-employment and/or property income.

What Changes Under MTD

Under the new regime you must:

  • Use HMRC-approved digital software to keep your records and submit information
  • Submit quarterly updates during the tax year
  • Complete a year-end finalisation via an end-of-period statement and digital declaration

This approach provides a clearer picture of your tax position throughout the year and helps spread the compliance process, rather than dealing with everything after the year end.

How We Can Help

At Kingscott Dix, we can help you:

  • Choose and set up MTD-compatible software
  • Move your existing records into a compliant digital system
  • Manage quarterly reporting and meet all HMRC deadlines
  • Understand thresholds, exemptions, and transitional arrangements

Whether you’re a sole trader just getting started or a landlord preparing for these changes, we’ll guide you through every step of compliance.

Ready to get started? Contact us to discuss how MTD for Income Tax affects you and what actions you should take to be prepared.