The UK government is transforming the tax system. If you're self-employed, a landlord, or both, it's time to get familiar with Making Tax Digital (MTD)—the initiative that aims to simplify and digitise how you report and pay tax.
What Is Making Tax Digital?
Making Tax Digital is HMRC's move to modernise the UK tax system. The goal? To make it easier, more efficient, and more accurate for individuals and businesses to keep on top of their tax affairs.
Under MTD, you'll need to:
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Keep digital records of your income and expenses
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Use HMRC-approved software to submit updates
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Send quarterly updates and a final declaration to HMRC
When Does It Affect Me?
The rollout is being staggered:
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From April 2026: MTD for Income Tax applies to individuals with annual business or property income over £50,000.
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From April 2027: It will apply to those earning over £30,000.
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From April 2028: The threshold is expected to drop to £20,000.
If you fall below £20,000 in combined turnover, you're currently exempt—but this could change in the future.
What Will Change?
Currently, most self-employed individuals file one tax return per year via Self Assessment. Under MTD, you'll:
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Submit quarterly income and expense summaries (April–June, July–Sept, Oct–Dec, Jan–March)
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File a final end-of-year declaration by 31 January
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Ensure all records and submissions are made through compatible software
Why Is This Happening?
HMRC hopes that Making Tax Digital will:
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Reduce errors caused by manual entry
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Make tax more transparent throughout the year
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Give taxpayers a clearer idea of what they owe
It’s also a step towards fully digitised tax administration.
How to Prepare Now
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Review your income: Are you above the threshold?
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Get the right software: Check HMRC's list of approved MTD-compatible apps and tools.
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Start keeping digital records: Get used to inputting and categorising your income and expenses.
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Talk to an accountant: They can help you prepare and even handle submissions for you.
Common Questions
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Do I still need to do a tax return? Yes, but under MTD it becomes part of your final declaration.
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What if I’m not tech-savvy? Exemptions apply for those who genuinely can’t use digital tools—for example, due to age, disability, or location.
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Can I start early? Yes—HMRC welcomes early adopters via its pilot scheme.
Final Thoughts
Making Tax Digital is a big change—but it’s one designed to bring benefits to taxpayers and HMRC alike. Starting early and staying informed can help you make a smooth transition. For most self-employed people, the key to success will be planning ahead and choosing the right software.
💬 Want Support?
Drop a comment or send us an email for help picking software, signing up early, or setting up your record-keeping system. Let's make tax digital—and hassle-free!
Stay compliant, stay digital.
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