From April 2026, HMRC is making major changes to how self-employed individuals and landlords report their income tax. If you are affected, you’ll need to keep digital records and submit Returns to HMRC every quarter using approved software.

Who will be affected?

You’ll need to follow MTD rules if:

• You are a sole trader or landlord registered for Self-Assessment.
• You receive income from self-employment or property.
• Your total gross income from these sources is above the following thresholds:
  • Over £50,000: from 6 April 2026.
  • Over £30,000: from 6 April 2027.
  • Over £20,000: from 6 April 2028.

Gross income means your income before any expenses or tax deductions.

What will change?

Digital record-keeping: You must keep your business records digitally, either in accounting software or spreadsheets compatible with MTD.

• Recording transactions:  All individual transactions will need to be recorded.
• Quarterly Returns: Every three months, you’ll send HMRC a summary of your income and expenses.
• End-of-year declaration: At the end of the tax year, you’ll finalise your tax position and submit a final declaration (similar to your current tax return).

What information will you need to provide?

For each quarterly Return, you’ll need to submit:

• The period covered.
• Total income and total expenses, broken down by category (e.g. travel, premises, equipment).
• Adjustments and allowances (such as capital allowances or balancing charges).
• For landlords: income and expenses for each property business.

At year-end, you’ll also need to report:

• Other personal income (such as savings, dividends, PAYE income).
• Any claims for reliefs or allowances.
• Capital gains, if relevant.

What do you need to do now?

• Check if your income is above the threshold for the relevant year.
• Start keeping digital records if you don’t already.
• Choose MTD-compatible software (we can advise on the best options).
• Be ready for quarterly reporting—we can help you set up processes and provide ongoing support.

Exemptions

Some people are exempt from MTD, including:

• Those whose qualifying income falls below the threshold for three consecutive years.
• Individuals who are digitally excluded (e.g. due to age, disability, or remote location).
• Trustees, personal representatives, foster carers, and non-resident companies.

How we can help

As your accountants, we can:

• Assess your eligibility and timing for MTD.
• Help you set up and maintain digital records.
• Manage quarterly and annual submissions on your behalf.
• Advise on software and process changes to keep you compliant.

If you have questions or want to start preparing, please contact us. We’re here to help you make a smooth transition to Making Tax Digital.