We have produced a practical guide to help explain the changes, who is affected and how to prepare for Making Tax Digital for Income Tax.
Making Tax Digital
Making Tax Digital for Income Tax is here
The way many self-employed individuals and landlords report their income to HMRC is changing. Making Tax Digital for Income Tax (MTD for Income Tax) is part of HMRC’s wider move towards a fully digital tax system and will gradually replace the traditional once-a-year Self Assessment process for those affected.
From April 2026, individuals with qualifying self-employment and/or property income over £50,000 will need to comply with the new rules. The requirements will then expand to include more taxpayers in future years. For some, this may mean moving away from manual records or adapting existing processes. For others, it may simply involve changing how information is submitted to HMRC. Whether you are already affected, likely to fall into future phases, or simply want to understand what the changes mean for you, our team can help you prepare with clarity and confidence.
What the changes mean for you
Making Tax Digital for Income Tax introduces a more regular digital approach to tax reporting for self-employed individuals and landlords.
Under the new system, affected taxpayers will need to:
- keep digital records
- use HMRC-compatible software
- submit quarterly updates to HMRC
- complete a final year-end declaration
Rather than preparing everything once a year at tax return time, the system is designed to create a more up-to-date digital reporting process throughout the year.
While this represents a significant operational change for some taxpayers, many clients find the process becomes far more manageable once the right systems and support are in place.
Who is affected and when
MTD for Income Tax is being introduced in phases.
From April 2026
Self-employed individuals and landlords with qualifying income over £50,000 will be required to comply with MTD for Income Tax.
From April 2027
The threshold will reduce to individuals with qualifying income over £30,000.
From April 2028
The threshold will reduce further to individuals with qualifying income over £20,000.
Qualifying income is based on gross income from self-employment and property combined, before expenses are deducted.
Even if you are not yet within the rules, now is a sensible time to begin reviewing your records, systems and processes ahead of future phases.
Preparing for the changes
For many taxpayers, the biggest change will be moving from annual reporting towards more regular digital record keeping and quarterly submissions.
Depending on your current setup, this may involve:
- reviewing how you currently keep records
- moving away from paper-based systems
- introducing compatible accounting software
- adapting spreadsheets and digital processes
- improving the frequency and accuracy of bookkeeping
For some individuals, the transition will be relatively straightforward. Others may benefit from additional support, particularly where there are multiple income sources, property portfolios or more complex arrangements.
The important thing is not to leave preparation until the last minute. Early planning helps ensure the transition is smoother and avoids unnecessary pressure as deadlines approach.
How Ward Williams can help
Every client’s situation is different and there is no single approach that works for everyone. At Ward Williams, we are supporting clients in a way that suits their needs, confidence with technology and level of involvement they want in the process.
Full support
For clients who would prefer us to manage the process, we can assist with digital records, quarterly submissions and ongoing compliance requirements.
Software support and oversight
For clients who are comfortable using software themselves, we can help you select suitable HMRC-compatible solutions, implement systems and provide ongoing support and review where required.
Preparing for future phases
Even if you are not immediately affected, this is an opportunity to review your wider bookkeeping, reporting and tax processes ahead of the future rollout of MTD.
Software and digital records
One of the key parts of MTD for Income Tax is the requirement to maintain digital records using compatible software. There is no one-size-fits-all solution. The right approach will depend on the complexity of your affairs, the number of income sources you have and how involved you want to be in the bookkeeping process.
Some clients may benefit from cloud accounting software, while others may continue using spreadsheets alongside bridging solutions where appropriate.
We can help you understand the available options and recommend a practical solution that works for your circumstances.
Frequently Asked Questions
Does MTD for Income Tax replace Self Assessment?
MTD changes how information is reported throughout the year, but there will still be a final year-end process to finalise your tax position.
What income counts towards the threshold?
The threshold is based on gross income from self-employment and property combined, before expenses are deducted.
I already use spreadsheets. Can I continue?
Potentially, yes. In some cases spreadsheets may still be used if they work alongside compatible bridging software and meet HMRC’s digital requirements.
What if I have both rental and self-employed income?
The income sources are combined when assessing whether you meet the threshold for MTD.
Do I need to register immediately?
Not everyone will fall into MTD at the same time. The rollout is phased and depends on your level of qualifying income.
What records will I need to keep?
You will need to maintain digital records of income and allowable expenses using compatible systems.
Latest MTD insights and updates
As the rules continue to develop, we will continue to share updates, guidance and practical insights around Making Tax Digital for Income Tax.
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Speak to our team
Making Tax Digital for Income Tax does not need to feel overwhelming. Whether you need help understanding whether the rules apply to you, support selecting software, or assistance managing the reporting requirements, our team is here to help you prepare with confidence.
Talk to us today about how we can help with both your personal and business needs. Connect with us on social media to stay up to date.