Making Tax Digital — Q&A

Making Tax Digital — or MTD — is a government initiative to modernise the UK tax system. Instead of filing one annual tax return, HMRC is moving to a system where you keep digital records and send updates more regularly throughout the year. It sounds like a lot, but with the right support, it can actually make things feel simpler and clearer. 

 It depends on your income. Here's how it's being phased in:

• From April 2026 — if your gross income from self-employment and/or property is over £50,000, MTD applies to you.
• From April 2027 — the threshold drops to £30,000.
• From April 2028 — it extends to those earning over £20,000.

It's worth noting that this applies to your gross income — that's before any expenses are deducted. If you're unsure where you sit, we're happy to help you work it out.

Your qualifying income includes money from self-employment and property rental. Things like wages from employment, pensions, dividends, and investment income don't count towards the MTD threshold. 

 Instead of one annual Self Assessment return, you'll need to:

• Keep your financial records digitally (using approved software)
• Submit a summary of your income and expenses to HMRC four times a year — once per quarter
• File a final year-end declaration once the tax year is complete

The good news is that your payment deadlines don't change — it's just the way records are kept and reported that's different.

You'll need to use software that is approved and compatible with HMRC's MTD system. We work with tools like QuickBooks and FreeAgent, both of which are MTD-ready. We can help you get set up and make sure everything is connected correctly — so you're not left figuring it out on your own. 

HMRC is introducing a points-based penalty system for late submissions. You'll accumulate a point for each missed deadline, and once you reach a certain number, a financial penalty applies. The best way to avoid this is simply to have a system in place — which is exactly what we're here to help with. 

HMRC is sending letters to taxpayers who may be affected, but it's your responsibility to check whether MTD applies to you — even if you haven't received anything yet. If your income is near or above the thresholds, it's worth starting to prepare sooner rather than later. 

That's completely understandable — and you're not alone. MTD is a significant change, and it's natural to feel unsure about where to start. That's exactly what we're here for. We can look at your situation together, explain what applies to you, and make sure everything is in place well before any deadlines.

No stress, no confusion — just calm, clear guidance.