Getting ready for Making Tax Digital for Income Tax

“Q: I’m hearing a lot of self-employed people talking about Making Tax Digital (MTD). What is MTD and do I need to comply with it?”

Making Tax Digital is HM Revenue & Customs's (HMRC’s) ongoing project to move UK tax over to a digital system. Making Tax Digital is already mandatory for VAT-registered businesses. But MTD will soon be extended to include those who use the self-assessment tax system.

“A: If you use the self-assessment tax system to file a return, from April you may be liable to switch to the Making Tax Digital for Income Tax system.”

The Making Tax Digital for Income Tax system will be expanded to include more sole traders and landlords from 6 April 2026. This is likely to bring a large number of self-employed tradespeople, freelancers, contractors and private landlords within the scope of MTD.

You’ll need to use Making Tax Digital for Income Tax if all of the following apply:

• You’re a sole trader or a landlord registered for self assessment,
• You get income from self-employment or property, or both,
• Your qualifying income is more than £20,000 — read more about what qualifying income is and what is included.

“Q: When will I need to start using MTD for Income Tax?"

“A: The start date for using Making Tax Digital for Income Tax depends on your qualifying income within a tax year.”

If your qualifying income is over:

• £50,000 for the 2024 to 2025 tax year, you will need to use it from 6 April 2026
• £30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027
• £20,000 for the 2026 to 2027 tax year, the government has set out plans to introduce legislation to lower the qualifying income threshold

Getting you ready for the April 2026 MTD deadline

To be ready for MTD for Income Tax, it’s important to have approved accounting and record-keeping software in place that can export data in the correct format.

You’ll also need a clear process for logging and tracking all your financial transactions, expenses, payments and income streams.

Our team can help you prepare and choose the most appropriate software.