Making Tax Digital for Income Tax, handled end to end
Making Tax Digital for Income Tax brings digital records and quarterly updates for sole traders and landlords. We set up MTD compatible software, file every submission and keep you ahead of each deadline.
Making Tax Digital for Income Tax replaces the single annual tax return with digital record-keeping and quarterly updates to HMRC. It is the biggest change to Self Assessment in a generation, and it is already under way.
What is changing
If you are a sole trader or landlord above the income threshold, you now keep your records in HMRC-recognised software, send HMRC a summary every quarter, and confirm the year with a final declaration instead of the old return. HMRC calls it MTD for Income Tax Self Assessment, or MTD ITSA for short: four small deadlines a year rather than one big one.
Handled well, Making Tax Digital for sole traders and landlords is genuinely useful: you see your tax position building through the year instead of discovering it the following January. Handled late, it is four chances a year to miss a deadline. Our job is to make it the former.
What we do
- MTD compatible software set up on Xero or QuickBooks, with your bank feed connected
- Digital records kept clean and HMRC-compliant right through the year
- All four quarterly updates prepared and filed for you, ahead of each deadline
- The final declaration completed, with every allowance and relief claimed
- Reminders before every Making Tax Digital deadline, and HMRC dealt with for you as your appointed agent
Making Tax Digital thresholds and deadlines
| Qualifying income | Start date |
|---|---|
| Over £50,000 | Joined April 2026 |
| Over £30,000 | Joins April 2027 |
| Over £20,000 | Joins April 2028 |
Qualifying income is your combined gross income from self-employment and property, before expenses. If the first threshold caught you, you are already in; if not, the dropping thresholds mean it is a question of when, not if. Our guide covers the 2027 MTD deadline in detail.
There is no separate sign-up deadline to diarise. HMRC judges each start date on the tax return filed two years earlier, and we handle the Making Tax Digital sign up with HMRC as part of getting you ready. The deadlines that matter after that are fixed: a quarterly update a month after each quarter ends, and the final declaration by 31 January.
Already VAT-registered?
VAT-registered businesses have filed digitally under MTD for VAT for years, and that side does not change. This page covers the separate Income Tax rollout. For quarterly VAT filing, see our VAT returns service.
Quarterly updates, explained
Each update is a summary of your income and expenses for the year so far, sent straight from your software. The figures are cumulative running totals, so a slip in one quarter simply corrects in the next, and there is no tax to pay with any of them.
The rhythm is the real change. Updates are due a month after each quarter ends, on 7 August, 7 November, 7 February and 7 May, and the final declaration that confirms the year is due by 31 January as before. Quarterly reporting to HMRC sounds heavy; with the records kept as you go, each update becomes a few minutes of checking rather than a scramble.
Making Tax Digital for landlords
Landlords join on the same thresholds, and rent catches people out because it is gross rents that count, not profit after mortgage interest and repairs. £2,500 a month of rent is £30,000 of qualifying income on its own, before a single cost comes off.
Jointly owned property splits the income between the owners for the threshold test, and self-employment income stacks on top of rent. If property is part of your picture, our landlord accountancy service starts every conversation with the threshold check and handles the quarterly updates alongside the rest of your landlord tax.
MTD compatible software
You need HMRC-recognised, MTD compatible software to keep the records and file the updates; spreadsheets alone no longer cut it. We work in Xero and QuickBooks, both recognised by HMRC, and the set-up, the bank feed and the training are part of the service.
Done properly, the software quietly pays for itself: transactions arrive from the bank feed on their own, receipts are photographed rather than shoeboxed, and you can see what tax to set aside all year instead of guessing in January.
Making Tax Digital penalties
Late quarterly updates earn penalty points rather than instant fines. Each missed deadline is a point; at four points HMRC charges £200, and every further miss while you sit at four is another £200. The points expire after a sustained run of on-time submissions.
Late payment is penalised separately, and the final declaration keeps the existing Self Assessment penalty regime. None of this should ever reach you: we file ahead of every deadline and chase you for anything missing well before it matters.
Making Tax Digital exemptions
A small number of people can apply for exemption: where age, disability or where you live makes software genuinely unworkable, or where religious beliefs are incompatible with keeping electronic records. Exemption is not automatic; you apply to HMRC and they decide.
Below the income thresholds you are outside MTD anyway until your income crosses the line, and anyone already exempt from MTD for VAT is normally exempt here too. If you think an exemption fits you, we will make the case to HMRC for you.
What it costs
A fixed monthly fee, agreed up front, that covers MTD compatible software, the quarterly updates and the final declaration. Use our instant estimate tool for a ballpark in under a minute. After a quick call we send your final quote by email. No hidden fees.
Switching to us
Already with an accountant who has not mentioned MTD? A Making Tax Digital accountant should have raised it a year ago. Switching takes one email. We do the rest: records collected, software connected and your next quarterly update filed on time.
Does MTD apply to you?
Two quick questions tell you which Making Tax Digital threshold catches you, and when. No email address required.
Am I affected by Making Tax Digital?
MTD means quarterly online submissions for many sole traders and landlords. Two quick questions tell you if it applies.
It’s an old return that decides it. HMRC looks back at your 2024/25 return, the one due on 31 January 2026. If the self-employment and rental income on it came to more than £50,000, you’re in from 6 April 2026 and your first quarterly update is due 7 August 2026. What you earn this year doesn’t change that.
It’s turnover, not profit. HMRC counts income before expenses, and adds self-employment and property together. £32,000 of trade plus £24,000 of rent is £56,000, so it counts even though the profit is far smaller.
What actually changes. Digital records, four quarterly updates a year, then your tax return as usual. The updates are running totals rather than four separate returns, and your payment dates don’t move.
Making Tax Digital questions, asked by every sole trader and landlord.
Get in touchIt depends on your qualifying income. Over £50,000 joined in April 2026, over £30,000 joins in April 2027, and over £20,000 joins in April 2028. Each of those Making Tax Digital deadlines is judged on the tax return you filed two years earlier. We check your figures, tell you your exact start date and get everything ready well before it.
Your gross income from self-employment and property added together, before any expenses are deducted. A plumber earning £35,000 with £20,000 of rent is over the £50,000 line even though neither source is on its own. That combined figure is what every Making Tax Digital threshold is measured against.
Yes. You need HMRC-recognised, MTD compatible software; spreadsheets alone no longer cut it. We set clients up on Xero or QuickBooks, connect the bank feed and show you the two or three things you actually need to touch. Most people find it easier than what they did before.
Under MTD ITSA the annual return is replaced by four quarterly updates plus a final declaration that confirms the year and claims your allowances and reliefs. The tax you pay and the payment dates stay the same; it is the reporting that changes.
For now, yes, but the Making Tax Digital threshold drops to £30,000 in 2027 and £20,000 in 2028, so most sole traders and landlords will be in within a few years. Moving to digital records early, at your own pace, is far calmer than doing it against a deadline.
Talk to chartered accountants in London & Slough.
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