The way self-employed individuals and landlords manage taxes is about to change. HMRC rolled out Making Tax Digital (MTD) for Income Tax in April 2026, moving away from annual paper-based filings toward a streamlined, digital-first system.
Here is a quick breakdown of what changed and how it could affect you.
What is Making Tax Digital?
MTD is a government initiative designed to reduce manual errors and make it easier for businesses to stay on top of their finances. Instead of filing one end-of-year Self Assessment, you will use HMRC-compatible software to keep digital records and provide regular updates.
The timeline: when do you need to act?
The rollout is based on your annual business or property income:
April 2026: Mandatory for those earning over £50,000.
April 2027: Mandatory for those earning over £30,000.
Future: HMRC plans to expand these thresholds further in the coming years.
The three key changes
Quarterly reporting: Instead of one annual deadline, you will submit a digital summary of income and expenses every three months.
Digital record keeping: You must use compatible apps or software to record every transaction. Paper ledgers or simple spreadsheets that don't sync with HMRC will no longer be enough.
End of year declaration: You will still need to submit a final declaration by January 31st to finalize your tax liability and make any necessary adjustments.
How to get ready
Check your Software: Ensure your current accounting tool is MTD-compatible. If you don't have one, now is the time to explore options like FreeAgent or Xero.
Start now: You don’t have to wait for the deadline. Switching to digital record-keeping now will help you spot errors early and simplify your transition.
Seek advice: If your setup is complex, consult an accountant to ensure your digital workflow meets HMRC’s requirements.
Want to dive deeper into the roadmap and specific software requirements? Read the full guide on the Mettle blog here.
