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Making Tax Digital for Income Tax represents one of the most significant changes to the UK tax system for self-employed individuals and landlords in recent years. From April 2026, many taxpayers will need to adopt a new way of keeping records and reporting their income to HMRC using compatible software.

For those currently relying on annual Self Assessment, this shift introduces more frequent reporting and a stronger focus on digital record keeping. While the changes are designed to improve accuracy and streamline tax administration, they also require careful preparation.

At Sherwin Currid, we work with small businesses, freelancers, sole traders and landlords, many of whom will be directly affected by these changes. This guide explains what Making Tax Digital for Income Tax involves, who needs to comply, and how to prepare in a practical and manageable way.

• Making Tax Digital for Income Tax becomes mandatory from April 2026 for individuals above the income threshold
• You will need to keep digital records and submit quarterly updates using compatible software
• Sole traders and landlords are the most likely to be affected by the changes
• Early preparation makes the transition smoother and reduces the risk of errors
• Ongoing support can help ensure compliance and simplify the reporting process

Did you know? Many taxpayers will move from one annual submission to multiple updates each year under Making Tax Digital.

Making Tax Digital for Income Tax is a government initiative that requires individuals with income from self-employment or property to keep digital records and submit updates to HMRC using compatible software.

Under the new system, you will need to:

• Keep digital records of your income and expenses
• Submit updates to HMRC every quarter
• Complete a final submission after the end of the tax year

This replaces elements of the traditional Self Assessment process, where information is typically submitted once per year.

• Digital record keeping: Paper records or spreadsheets alone will not meet the requirements unless they are linked to compatible software
• Regular reporting: Income and expenses are reported during the year rather than annually
• Software-based submissions: Updates must be sent through HMRC-recognised software

The aim is to reduce errors and give taxpayers a clearer view of their tax position throughout the year.

The introduction of Making Tax Digital for Income Tax will be phased.

Key dates to be aware of

Qualifying income refers to your total gross income from:

• Self-employment
• Property

This is calculated before expenses are deducted.

Even if you are not required to comply from April 2026, it is sensible to begin preparing early. Moving to digital systems and understanding the reporting process in advance will make the transition significantly smoother.

Making Tax Digital for Income Tax applies to individuals who are already within Self Assessment and meet the qualifying income thresholds.

• A sole trader running your own business
• A landlord receiving rental income
• Someone with both self-employment and property income

• Qualifying income is based on total income before expenses
• Multiple income streams are combined when assessing thresholds
• Other income sources such as employment income or dividends are not included in this calculation

Some individuals may fall below the thresholds or qualify for exemptions, but the direction of travel is clear. Digital reporting is becoming the standard, so early preparation is advisable even if you are not mandated straight away.

MTD for Sole traders and MTD for landlords will experience the most direct impact from Making Tax Digital for Income Tax.

• You will need to maintain digital records of all business transactions
• Income and expenses must be categorised accurately
• Quarterly submissions will become part of your routine

• Rental income and allowable expenses must be recorded digitally
• Each property or portfolio needs to be managed carefully
• Records should be kept up to date throughout the year

If you have both self-employment and property income, you will need to ensure that:

• Records are clearly separated
• Each income source is tracked accurately
• Reporting is consistent across all activities

This represents a shift from an annual process to ongoing compliance, which is why having the right systems in place is essential.

One of the most significant changes under Making Tax Digital for Income Tax is the introduction of quarterly updates.

Quarterly updates are summaries of your income and expenses submitted to HMRC throughout the year.

You will report four times during the tax year, covering:

• Quarter 1: April to June
• Quarter 2: July to September
• Quarter 3: October to December
• Quarter 4: January to March

Each update will include:

• Total income for the period
• Total expenses for the period
• Categorised financial data

In addition to quarterly updates, you will still need to:

• Finalise your figures after the tax year ends
• Submit a final declaration to confirm your tax position

Quarterly reporting does not automatically mean that tax is paid quarterly. It relates to reporting obligations rather than payment schedules.

To comply with Making Tax Digital for Income Tax, you must use software that is compatible with HMRC’s systems.

MTD-compatible software allows you to:

• Keep digital records
• Submit quarterly updates
• Send final declarations to HMRC

• Secure digital record keeping
• Ability to categorise income and expenses
• Integration with HMRC systems
• User-friendly interface

Choosing the right software early can:

• Simplify compliance
• Reduce the risk of errors
• Save time on administration

At Sherwin Currid, we support clients in selecting and implementing software that aligns with their business needs and reporting requirements.

Preparation is key to a smooth transition.

• Review how you currently keep records
• Move away from paper-based systems where necessary
• Ensure income and expenses are recorded consistently
• Choose suitable MTD-compatible software
• Familiarise yourself with quarterly reporting deadlines

• Keep records up to date rather than leaving them until year end
• Separate personal and business finances clearly
• Regularly review your financial data for accuracy

• Reduced stress when the rules come into effect
• Greater confidence in your reporting
• Improved visibility of your financial position

Early action allows you to adapt gradually rather than making rushed changes later.

Many people ask whether they need an accountant to comply with Making Tax Digital for Income Tax.

You may benefit from working with an accountant if:

• You have more than one income source
• You are unsure whether you meet the thresholds
• You are not confident using accounting software
• You want to ensure full compliance with HMRC requirements

An accountant can:

• Help you choose and set up the right software
• Ensure your records meet digital requirements
• Manage quarterly submissions on your behalf
• Provide guidance throughout the year

Rather than reacting at the end of the tax year, Making Tax Digital encourages a more proactive approach to managing your finances. Professional support can make this process more efficient and less time-consuming.

If you are searching for a Making Tax Digital accountant in the UK, it is important to choose a firm that understands both the technical requirements and your individual circumstances.

• Clear explanations of the rules
• Help understanding whether they are affected
• Support with software setup
• Ongoing assistance with reporting

• Experience working with sole traders and landlords
• Strong understanding of Making Tax Digital requirements
• Ability to provide practical, ongoing support
• Clear and responsive communication

Choosing the right accountant can make a significant difference to how smoothly you transition to the new system.

Support with Making Tax Digital can take several forms, depending on your needs.

• Initial assessment of your readiness
• Setup and configuration of software
• Ongoing support with quarterly updates
• Year-end submission assistance
• General compliance guidance

Making Tax Digital is not a one-off task. It requires consistent record keeping and regular reporting throughout the year. Having access to reliable support can help you stay on track and avoid issues.

A system that requires digital record keeping and regular reporting of income and expenses to HMRC using compatible software.

April 2026 for individuals with qualifying income over £50,000, with further expansion from April 2027.

Sole traders and landlords with qualifying income above the threshold.

Total gross income from self-employment and property before expenses.

Digital records of income and expenses, maintained throughout the year.

Software that is compatible with HMRC’s Making Tax Digital system.

Quarterly updates, plus a final submission after the end of the tax year.

Start using digital systems, organise your records, and understand your reporting obligations.

At Sherwin Currid, we provide practical support to help you navigate Making Tax Digital for Income Tax with confidence.

• Supporting the adoption of suitable software
• Assisting with the preparation and filing of returns
• Helping ensure ongoing compliance with HMRC requirements

We work closely with small businesses, freelancers, sole traders and landlords to provide tailored advice and ongoing support.

Our focus is on making the transition to Making Tax Digital as straightforward and manageable as possible.

Making Tax Digital for Income Tax is changing how individuals report their income and manage their tax obligations. With the first phase starting in April 2026, now is the time to understand what is required and begin preparing.

By putting the right systems in place and developing good record-keeping habits, you can approach these changes with confidence. Whether you manage the process yourself or seek professional support, early preparation will make a significant difference.