Making Tax Digital for Income Tax – 6 April 2026 (2026/27)
We’d like to make you aware of an important change coming from HMRC: Making Tax Digital for Income Tax, also known as MTD for IT.
This new system will change the way certain individuals report income to HMRC. It becomes mandatory from 6 April 2026 for those with combined self-employment and/or property income exceeding £50,000 in the 2024/25 tax year.
Based on your current records, it’s likely that you will fall within this category—so now is the time to prepare.
What will MTD for IT mean for you?
If you’re within the threshold, you’ll be required by law to use HMRC-compatible software to:
- Keep and retain digital records of income and expenses for each self-employment and/or property business.
- Submit quarterly updates of year-to-date transactions to HMRC.
- Finalise your annual return with details of other income, adjustments, and reliefs—all submitted digitally.
This will replace your annual Self-Assessment tax return starting with the 2026/27 tax year. Importantly, tax payment dates will not change, but failure to comply with the new rules may result in penalties.
What is compatible software?
HMRC will not be providing the software, but many existing accounting systems may already meet the requirements. If changes are needed, we’ll help you find an MTD-compatible solution that suits your needs and budget.
Why is HMRC making this change?
The aim is to improve tax accuracy and reduce errors by encouraging better digital record keeping. While this applies to everyone who meets the criteria—regardless of how good your current records are—it may actually be a great opportunity to streamline your systems and benefit from real-time data insights.
What should you do next?
We’re getting in touch now to give you plenty of time to prepare. Our team has experience supporting clients through HMRC’s previous digitalisation changes (such as MTD for VAT), and we’re here to guide you every step of the way.
If you’re interested, you can also consider joining HMRC’s testing programme for MTD during 2025/26. It’s a risk-free way to get comfortable with the new system, as no penalties will apply for late submissions during the test period. Just let us know if you’d like to take part.
👉 Read more about MTD for IT on GOV.UK
We’re here to help
We know this may feel like a lot of change, but don’t worry—we’ll work with you to find the right approach for your business. If you have any questions or would like to discuss how to prepare, please don’t hesitate to get in touch.