Making Tax Digital
The UK tax system is undergoing a significant change with the introduction of Making Tax Digital (MTD) for Income Tax.
Making Tax Digital (MTD) for Income Tax
This new initiative from HMRC is designed to modernise the tax system by requiring individuals to keep digital records and submit updates using compatible software.
From 6 April 2026, MTD for Income Tax will become mandatory for many sole traders and landlords, changing the way income and expenses are reported to HMRC.
What Will Change?
Under MTD, the way you report your tax information will change significantly. Instead of submitting a single annual Self Assessment return, you will need to:
Keep digital records of income and expenses
Submit quarterly updates to HMRC using approved software
Submit a final declaration at the end of the tax year to confirm your tax position
Although reporting will become more frequent, the timing of tax payments will remain the same, with payments on account and balancing payments still due in January and July.
Who Will Be Affected?
MTD for Income Tax will apply to individuals who:
- Are registered for Self Assessment
- Receive income from self-employment, property, or both
- Have total gross income from those sources above the relevant threshold
The rollout will happen in phases:
- From April 2026: individuals with qualifying income over £50,000
- From April 2027: individuals with income over £30,000
- Planned for April 2028: threshold expected to reduce to £20,000
How We Can Help
Preparing for MTD early can help avoid disruption to your business. At Fox Smith, we can support you with:
Assessing whether MTD will apply to you and when
Implementing compliant digital bookkeeping systems
Setting up and managing MTD-compatible software
Submitting quarterly updates on your behalf
Providing ongoing tax planning and advice
Our aim is to make the transition to MTD simple, compliant, and stress-free, so you can focus on running your business.
Get Ready for MTD
If you are a sole trader or landlord, now is the time to review your bookkeeping processes and ensure you are prepared for the upcoming changes.
If you would like advice on how Making Tax Digital will affect you, please get in touch with our team.