MTDMaking Tax Digital for Income Tax
Four updates a year instead of one return. Here is what it means for you.
If you are a sole trader or a landlord, Making Tax Digital changes how you keep records and how often you report. It is already in force for the highest incomes and phases in over the next two years — we move clients across a full year before their date, so the first quarter is routine.
When it applies to you
In force now
Income over £50,000
Already in force. Sole traders and landlords with combined gross self-employment and property income above £50,000 were the first in scope.
April 2027
Over £30,000
The threshold drops. If you are close to it, we start preparing a year ahead rather than waiting.
April 2028
Over £20,000
Most of our sole traders and landlords are in scope by this point, including part-time and second incomes.
Already VAT registered?
You have been filing VAT digitally since 2019. This is a separate change, and it covers income tax.
What changes
Three practical differences
Digital records become compulsory
Income and expenses have to be kept in software. A carrier bag of receipts and a spreadsheet at the year end will no longer satisfy HMRC.
Quarterly updates to HMRC
Four summaries a year, one month after each quarter. They are estimates, not four tax bills — the tax is still worked out once.
A final declaration replaces the return
After the year end you confirm the full position, including anything outside the business. Still due by 31 January.
How we get you ready
- We check whether — and when — MTD applies to you.
- We set you up on Sage (or Xero) and move your records across.
- We file the quarterly updates for you and confirm each one.
- Your year-end position still gets a human review before it goes.