Making Tax Digital (MTD) from April 2026 - what does it mean?

1 year, 1 month ago by Oliver Atkinson

MTD for Income Tax

From April 2026, the UK government’s Making Tax Digital (MTD) initiative will require all sole traders and property clients to submit
quarterly returns. The government claims that quarterly updates will spread the workload more evenly throughout the year and help businesses stay on top of their finances and avoid the last-minute rush.

Who is affected:

When you need to start using Making Tax Digital for Income Tax depends on your qualifying income within a tax year. If your qualifying income is over:

£50,000 for the 2024 to 2025 tax year, you will need to use it from 6 April 2026

£30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027

£20,000 for the 2026 to 2027 tax year, the government has set out plans to introduce legislation to lower the qualifying income threshold

Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted.

Requirements:

Taxpayers affected will need to submit a summary to HMRC of their income and expenses each quarter, fed from their digital records. These are not ‘mini tax returns’, instead, they will just represent the total of each category of income and expense that quarter.

After the fourth quarterly update has been filed, the taxpayer will need to submit a ‘digital tax return’. This will be like the current Self-Assessment return but will pre-populate with the income and expenses from the quarterly updates already filed.

Quarterly Update Deadlines:

For further information and support, please contact us.