From 6 April 2026, sole traders and landlords with qualifying income over £50,000 will need to use Making Tax Digital for Income Tax. HMRC‘s Craig Ogilvie recently appeared on Fix Radio‘s Carpentry Show to explain what businesses need to know.
Who’s Affected?
You’re in scope if you’re registered for Self Assessment and earn more than £50,000 annually from self-employment or property income. That threshold applies to your total qualifying income from these sources combined.
What Changes
Making Tax Digital changes how you keep records and report throughout the year.
You’ll need compatible software to:
- Keep digital records of your income and expenses
- Send quarterly updates to HMRC (not full submissions — more like progress reports)
- Submit your final tax return by 31 January following the tax year
The quarterly updates replace estimates. You’re telling HMRC roughly where you are, not filing formal returns four times a year. The actual tax calculation still happens with your final submission in January.
The Software Question
“Compatible software” sounds expensive, but options range from free to enterprise-level. HMRC’s software list includes packages at every price point.
If you already use cloud accounting software (Xero, QuickBooks, FreeAgent), you’re probably sorted. Most major packages added MTD compatibility in 2025.
If you’re currently spreadsheet-based or paper-based, you need to move. The software doesn’t have to be fancy. It just has to connect to HMRC’s systems and keep your records in the format they want.
What About Agents?
If you use an accountant or bookkeeper, they can handle the quarterly submissions on your behalf. You’ll need to authorise them through HMRC’s system, but it’s straightforward.
Agents are seeing this as better service. Quarterly check-ins mean they can spot issues earlier, rather than discovering in January that you forgot to log six months of expenses.
Exemptions Exist
Not everyone above the £50,000 threshold has to join immediately. HMRC offers exemptions for:
- Religious objections to computers
- Age (if you’re over 65 in certain circumstances)
- Disability preventing digital record-keeping
- Geographic location with no internet access
- Insolvency or serious illness
These aren’t automatic. You need to apply through HMRC’s exemption process and show why MTD creates genuine difficulty for you.
What to Do Now
Before 6 April:
- Check your qualifying income for 2025/26. If you’re close to £50,000, you’re likely crossing it this year or next.
- Review your current record-keeping. If it’s not digital, start looking at software options.
- If you use an agent, confirm they’re MTD-ready and discuss how quarterly reporting will work.
If you’re already over £50,000:
Sign up now through HMRC’s online service. Getting your first quarter under your belt before the legal deadline removes pressure.
The Reality
HMRC wants real-time visibility of the tax base. Quarterly updates give them earlier warning of economic shifts and catch problems sooner.
For businesses, the benefit isn’t obvious until you’ve done a year. The quarterly discipline forces you to keep records current rather than scrambling in January. You’ll know your tax position earlier, which helps with cash flow planning.
The downside? More admin. Four submissions a year instead of one. If your record-keeping is already tight, it’s not a huge lift. If you’re currently doing a January sprint through shoeboxes of receipts, MTD will hurt.
Where to Get Help
- HMRC’s MTD guidance collection
- MTD webinars and video guides
- Sign up for MTD (if already eligible)
The April deadline is real. Start now if you haven’t already.