This MTD explainer was written by Rob Webb - MTD Accountant.
Click here for Rob's MTD services.
Making Tax Digital (MTD) is a major change to how self-employed individuals and landlords report their income to HMRC. Instead of completing just one tax return each year, you’ll be required to:
The idea is to move away from last-minute tax returns and towards keeping records up to date throughout the year.
From April 2026, MTD for Income Tax will apply to:
👉 if your gross income (before expenses) from these sources is over £50,000 in the 2024/25 tax year.
This threshold is expected to reduce to £30,000 from April 2027.
So although it starts in 2026, your eligibility is based on what you’ve already earned.
HMRC is moving towards a more digital system to:
Regardless of opinions on the change, the key thing is understanding what you need to do and getting prepared early.
Under MTD, you'll need to:
The biggest change is not what you report — it’s how regularly you report it.
Quarterly updates are not full tax returns.
They are simply:
👉 a summary of your business income and expenses for that period.
You won't need to:
Think of it as keeping HMRC updated as you go along.
Digital records simply means keeping your records electronically rather than on paper.
This could include:
The key is that your records are kept in a digital format and updated regularly.
In most cases, yes — some form of software will make this much easier.
Software can:
While spreadsheets are allowed, many people find proper software simpler in the long run.
Yes - you can.
If you are:
…you can manage this yourself.
However, many people prefer support because:
At the moment, many people:
Under MTD:
It's a shift in habit more than a shift in complexity.
Yes — if you are self-employed under CIS and over the threshold, MTD still applies.You will need to report your full income and expenses, not just what’s left after deductions.
That is only a payment towards your tax — your full position still needs to be calculated.
If your self-employment genuinely stops before MTD begins, it may not apply — but this depends on your situation.
Then MTD won’t apply from April 2026 — but it most likely will apply next year (April 2027) if your income is similar.
Changing business structure is a bigger decision than just avoiding MTD and should be considered carefully.
No — MTD doesn’t change tax rates. It changes how and when information is reported.
This is exactly why starting early helps. Simple habits now can make a big difference later.
Leaving things until the last minute can lead to:
Starting early gives you time to:
I work with self-employed individuals and landlords to help them prepare for Making Tax Digital and manage the ongoing requirements.
This includes:
The aim is to make the whole process as straightforward and stress-free as possible.
If you’d like help understanding your situation or getting set up:
👉 You can explore my Making Tax Digital services
👉 Or get in touch to arrange a quick call
I’ll help you understand exactly what you need to do — and the simplest way to do it.