What Is Making Tax Digital?

Making Tax Digital (MTD) is the biggest change to tax reporting for sole traders, landlords and the self-employed in recent years. Whether you’re fully on board, still adjusting, or getting everything ready for April, MTD for Income Tax will soon be mandatory for almost all businesses and self-employed individuals in the UK.

All VAT registered businesses and self-employed workers, regardless of their turnover are already required to file, pay, and update their VAT information online each quarter. They must use HM Revenue & Customs (HMRC) compliant online accounting software or the tax authority’s own API using bridging tools.

If you need help managing the transition to MTD or would like to speak to one of our team members about the impact this will have on your reporting, please get in touch.

Do I have to comply with Making Tax Digital?

From April 2026, landlords, sole traders and self-employed individuals with annual business or property income above £50,000 will need to follow the rules for MTD for Income Tax, which will also require them to complete quarterly reports using compliant software.

This will be followed in April 2027 by a decrease in the qualifying income to £30,000.

Then, in April 2028, this will be further reduced to £20,000.

(Making Tax Digital for VAT is already in effect and has been mandatory for all VAT-registered businesses since April 2022).

To find out more about the road ahead for Making Tax Digital, please check out the roadmap below:

If you want to learn more about the various stages of MTD you can also download our helpful guide:

Need help?

We have been assisting a wide range of businesses with their preparations for MTD and can help you find the right systems and solutions to ensure compliance, while also giving you access to the latest insights and information about your business.

With the potential for penalties for non-compliance, it is important that you act quickly if you aren’t currently following the requirements of MTD.