📘 Making Tax Digital for Income Tax: How to Prepare for April 2026

From April 2026, HMRC’s Making Tax Digital (MTD) rules will apply to sole traders and landlords earning over £50,000. If that’s you—or your clients—it’s time to prepare for quarterly digital reporting. Here’s what you need to know and how to get ahead.

✅ Who Needs to Comply?

MTD for Income Tax Self Assessment (MTD ITSA) applies to:

• Sole traders and landlords registered for Self Assessment

• Individuals with combined business and property income over £50,000

• Those not exempt due to age, disability, or lack of internet access

If your income is between £30,000 and £50,000, you’ll be included in the next phase—expected April 2027.

🧩 What Changes Under MTD?

Instead of one annual tax return, you’ll need to:

• Keep digital records of income and expenses

• Submit quarterly updates to HMRC

• File a final end-of-year declaration by 31 January

This means more frequent reporting—but also more visibility into your tax position throughout the year.

🛠️ How to Prepare Now

Here’s how to get ready:

1. Choose MTD-Compatible Software

Use HMRC-recognised software to record transactions and submit updates. Popular options include:

• Xero

• QuickBooks

• FreeAgent

• Sage

Spreadsheets alone won’t be enough—you’ll need bridging software if you prefer Excel.

2. Update Your Record-Keeping Habits

Start tracking:

• Income and expenses in real time

• Receipts and invoices digitally

• Separate records for each business or property

This will make quarterly submissions smoother and reduce errors.

3. Speak to Your Accountant Early

We’ll help you:

• Select the right software

• Set up digital records

• Ensure full compliance with HMRC

Already have an accountant but thinking of switching? We’ll handle the transition—including notifying your current provider—so you can avoid any awkward conversations.

🚀 Final Thoughts

MTD for Income Tax is a major shift, but with the right tools and habits, it can simplify your tax life. Start preparing now to avoid last-minute stress and stay ahead of the curve.

Need help getting started? Contact A&T Accountants Ltd—we’ll guide you every step of the way.