What is Making Tax Digital?

Making Tax Digital (MTD) is HMRC’s shift to digital tax reporting. Businesses and individuals must keep digital records and submit information through approved software.

For income tax, this means quarterly updates during the year, followed by a final year-end declaration.

What you’ll need to do to stay compliant

To meet HMRC requirements, you’ll need to:

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    Keep digital records of income and expenses

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    Use MTD-compatible software

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    Submit quarterly updated to HMRC

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    Submit an end of period statement (EOPS)

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    Complete a final declaration (your tax return)

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When does Making Tax Digital for Income Tax start?

Making Tax Digital for Income Tax begins in phases:

  • From April 2026: individuals with qualifying income over £50,000
  • From April 2027: individuals with qualifying income over £30,000

This is a reporting change, not a new tax. But it will change how often you report, how you keep records, and how much admin sits on your plate.

Free e-book: How To prepare for Making Tax Digital

Our free guide is all you need as a sole trader or landlord to understand what Making Tax Digital for Income Tax means for you and how to make sure you're ready in time. 

It sets out what changes, costs and how to prepare. 

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Making Tax Digital for different types of taxpayer

MTD for income tax applies to different types of taxpayers. Here’s what it means for you.

Benefits of Making Tax Digital

Making Tax Digital changes  how records are kept. But it also gives you more control over your taxes and day-to-day finances.

  • No surprises. See your estimated tax position as you go, so you can plan ahead and avoid last-minute strain

  • Fewer errors in reporting. Digital records reduce manual entry and lower the risk of mistakes in submissions

  • Faster access to financial information. Up-to-date data when you need to make decisions on pricing, spending and tax planning.

  • More efficient admin. Automation can handle routine tasks, freeing up time to focus on running your business. 
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How we help you get ready for MTD for ITSA

If you want to stay compliant and avoid last-minute pressure, the work starts well before the first deadline. We’ll help you set up the right process, keep your records clean, and stay on top of what HMRC expects.

 

Here's how our MTD accountants can help you:

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    Confirm whether MTD applies to you and when

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    Confirm whether MTD applies to you and when

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    Prepare and submit quarterly updates in line with HMRC requirements

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    Keep year-end reporting clean and predictable

Making Tax Digital accounting software

Making Tax Digital for Income Tax requires compatible software. The right setup depends on how you work.

If you already use cloud software, we can configure it correctly and make sure it meets HMRC requirements. If you have multiple income streams, we can structure the system to avoid duplicate reporting and extra admin.

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Xero

Award-winning software that simplifies MTD compliance.

Learn more about Xero >

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Free Agent

FreeAgent makes MTD simple for both landlords and business owners.

Learn more about Free Agent>

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QuickBooks

QuickBooks offer desktop and online accounting software for small businesses

Learn more about Quick Books >

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Get Making Tax Digital for Income Tax advice

Book a free consultation with our MTD accountants

We’ll give you a tailored quote. When you’re ready, we begin next steps

 

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