Officially known as Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA), HMRC/UK Government call it an initiative to modernise the tax system by requiring digital tax records, however this also brings more frequent reporting for certain taxpayers.

From April 2026 self-employed individuals (sole traders) and landlords with annual gross income (i.e. turnover; income before deduction of any expenses) over £50,000 are impacted, and if you have both it is the combined turnover. So, if your sole trade has a turnover of £35,000 and your gross rents received are £20,000 you will be required to comply with MTD for ITSA.

Briefly, if it applies to you, this means:

• Keeping digital records of your income and expenditure
• Sending quarterly updates to HMRC using MTD-compatible software
• Submitting a Final Declaration at the end of the tax year

From April 2027 the threshold will lower to include those earning over £30,000

From April 2028 the threshold will lower to include those earning over £20,000

To prepare, we recommend:

1. Reviewing your income sources to see if you’ll be affected
2. Switching to MTD-compliant software (we can help you choose the right one for you)
3. Starting digital record-keeping as soon as possible
4. Talking to us about how we can support you through the transition

There are currently two MTD taxes: VAT (which came in 2022) and Income Tax (starting April 2026). As accountants and business advisors we’re here to help you make your accounting, navigating your business, and tax compliance as simple and efficient as possible:

• Digital accounting software we highly recommend* is Xero. It’s an HMRC recognised platform, MTD compatible, providing all your accounting tools in one place. We’re also a Xero silver partner which enables us to offer our clients a discount – helping you save money and time so that you can concentrate on doing what you love 
• Going digital will help you keep accurate records – helping you budget and review quarterly with up to date information
• We can handle everything you’d expect from an accountant and more; from bookkeeping, payroll, tax allowances, end of year accounts, tax investigations, business plans, business advise whatever your size; strategic decision making, growth, funding, planning ahead, selling your business – supporting you throughout the lifetime of you business and your personal needs, navigating challenges, celebrating wins, bringing clarity and confidence to help you achieve your goals. 

*Other platforms available, we’ll discuss what fits your needs best and find a solution that you feel comfortable with.

At the end of the day, we’re all human beings with responsibilities inside and outside of work, the two impact and benefit each other. If we can lighten the load on your shoulders to free up more time for you to spend with family and doing the things you love – we’re here to support you in numerous ways (…pun intended 🙂 ) including your transition to making tax digital smooth and stress-free.

If there’s anything you are not sure about MTD, please do contact us. Get ahead today.

Plus for everyone we assist in being prepared for MTD, we’ll provide 1 day of Internet Access and Technology Education to Children in Ghana via B1G1 

This B1G1 impact isn’t only about digital literacy. It’s about creating opportunities, equality, eliminating poverty and preparing young people for sustainable futures – the impact will ripple out to affect many lives.