Making Tax Digital

Making Tax Digital for Income Tax is live: what to do if you're caught (or soon will be)

· Craig Callum Associates

Making Tax Digital for Income Tax stopped being a future problem on 6 April 2026. If you're a sole trader or landlord whose qualifying income was over £50,000 on your 2024/25 return, you should already be keeping digital records and preparing your first quarterly updates. If you're between £20,000 and £50,000, your date is coming.

Who's in, and when

  • April 2026 (in force now): qualifying income over £50,000
  • April 2027: qualifying income over £30,000
  • April 2028: qualifying income over £20,000

"Qualifying income" is your gross self-employment and property income combined, before any expenses. A landlord with £52,000 of rent and only £15,000 of profit is over the line. So is someone with £30,000 of freelance income and £25,000 of rent (from April 2027).

What actually changes

The tax you pay doesn't change. The rhythm does:

  1. Digital records: income and expenses recorded in MTD-compatible software (Xero, QuickBooks, Sage; a bare spreadsheet only works with bridging software, and awkwardly)
  2. Quarterly updates: a summary of income and expenses sent to HMRC every three months
  3. Final declaration: a year-end submission that replaces the Self Assessment return, with the usual adjustments and reliefs

That's five submissions a year instead of one, each with its own deadline and its own late-submission penalty points.

The three steps to take now

1. Confirm your position. Check gross income on your last filed return against the thresholds. Borderline? The definition has corners (jointly owned property, VAT-inclusive figures for some traders). Two minutes with us settles it.

2. Get software running before you need it. The businesses coping best started digital record-keeping a full year before their mandate date. Bank feeds do most of the work once set up.

3. Decide who files the quarters. Doing it yourself is possible; most of our clients hand us the cycle and forget about it. Either way, decide before your first deadline, not the week of it.

We're onboarding affected clients now. Our MTD service covers software setup, records and all five annual submissions.


This article is general information, not advice for your specific circumstances. For advice you can act on, book a free consultation or call us on 0151 944 4342.

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