Making Tax Digital for Income Tax: The new requirements from April 2026

Sole traders and landlords should be aware of the introduction of Making Tax Digital (MTD) for Income Tax, which begins from 6 April 2026.

This marks one of the most significant changes to personal tax compliance in recent years. It represents a shift away from the traditional annual self-assessment model towards a system of more frequent, digital reporting.

MTD for Income Tax will apply to:

• Individuals with qualifying income over £50,000 from April 2026
• Over £30,000 from April 2027
• Over £20,000 from April 2028

For those within scope, the way income is reported to HMRC will change fundamentally. Rather than submitting a single annual tax return, individuals will be required to:

• Maintain digital records of income and expenses
• Submit quarterly updates to HMRC
• Complete an end-of-period statement
• Submit a final declaration to confirm total taxable income

While the underlying tax calculation remains broadly the same, the process becomes significantly more administrative and time-sensitive.

For many, particularly sole traders and landlords who have historically managed records annually or using spreadsheets, this will require a change in both systems and mindset.

The introduction of quarterly reporting is intended to improve accuracy and reduce errors, but in practice it will place greater emphasis on maintaining up-to-date records throughout the year.

This may also bring forward the visibility of tax liabilities, meaning individuals will have a clearer picture of their tax position earlier, but will need to be more proactive in managing cash flow.

From a practical perspective, businesses and individuals will need to ensure:

• Accounting records are kept digitally and consistently
• Appropriate software is in place and compliant with HMRC requirements
• Processes are established for quarterly submissions
• Responsibility for compliance is clearly defined

For some, particularly those with more complex income streams or multiple properties, the administrative burden may increase significantly.

However, for others, particularly those already using cloud accounting systems, the transition may be more straightforward.

This is not simply a compliance change. It is part of a wider move towards digitalisation across the tax system, and it will change how individuals interact with their financial information and their advisers.

At Ward Williams, we are already supporting clients through this transition from selecting appropriate software to establishing efficient reporting processes that minimise disruption and ensure compliance. Our dedicated Making Tax Digital brochure sets out the requirements in more detail and outlines practical steps to help you prepare.

Frequently asked questions

What is Making Tax Digital for Income Tax?
A government initiative requiring individuals to keep digital records and submit income updates to HMRC on a quarterly basis.

Who does this apply to?
Sole traders and landlords with qualifying income above the relevant thresholds.

What counts as qualifying income?
Total gross income from self-employment and property before expenses.

When do I need to start?
From April 2026 if your income exceeds £50,000.

Will I still complete a tax return?
A final declaration will still be required, but it will form part of a wider reporting process.

Do I need new software?
Yes, you will need to use HMRC-compatible software to maintain records and submit updates.

Can I still use spreadsheets?
Spreadsheets may be used if they are linked to compliant bridging software, but fully digital systems are generally more efficient.

What happens if I don’t comply?
Penalties may apply for late submissions or failure to maintain digital records.

Will this increase my workload?
In most cases, yes. Quarterly reporting introduces additional administrative steps.

Does this affect landlords with a single property?
Yes, if total qualifying income exceeds the threshold.

Can an accountant handle this for me?
Yes, many individuals will choose to work with an adviser to manage compliance and reduce administrative burden.

As reporting becomes more frequent and digital, preparation ahead of implementation will be key.

For many, this is an opportunity not just to ensure compliance, but to improve visibility, streamline processes and take a more proactive approach to financial management.

If you would like a copy of our Making Tax Digital brochure, or to understand how these changes apply to your circumstances, please get in touch.

Call 01932 830664, email enquiries@wardwilliams.co.uk or visit www.wardwilliams.co.uk to speak with a member of the team.

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Download your copy of Making Tax Digital Brochure