MTD for Income Tax – check if and when you need to use it

If you have not yet checked if and when you need to use Making Tax Digital (MTD) for Income Tax, you should do so as a matter of urgency. This is because from April 2026 the way many individuals report their tax to HMRC will change significantly. MTD for Income Tax represents a move away from the traditional annual self-assessment process towards a more frequent, digital approach, with taxpayers required to manage their affairs through an online tax account using compatible software.

From 6 April 2026, MTD for Income Tax will apply to self-employed individuals and landlords with qualifying income of more than £50,000 a year. A year later, from April 2027, this will extend to those with qualifying income between £30,000 and £50,000. Qualifying income is broadly the total income received from self-employment and property in a tax year, including income from multiple trades or rental properties. Other sources of income, such as employment income taxed under PAYE, dividends, pensions or partnership income, are excluded from this calculation.

Those within the scope of MTD for Income Tax will be required to keep digital records of their income and expenses and submit quarterly updates to HMRC. These updates provide summaries of income and costs and are intended to give HMRC a clearer picture of taxable income throughout the year. A final declaration will still be required after the end of the tax year, with any tax due payable by the following 31 January. A new points-based penalty system will also apply for late submissions and payments.

If you are unsure whether or when MTD for Income Tax will apply to you, or you would like help preparing for the changes, we would be happy to help.

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