The UK government is undergoing a major digital transformation—and tax reporting is no exception. With Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) set to affect millions of self-employed individuals and landlords, it’s crucial to understand what’s changing and how to prepare.

At Harvin Tax Accountants, we’re committed to keeping our clients compliant, stress-free, and ahead of the curve. Here’s what you need to know about MTD for Income Tax and how it impacts your business.

What is Making Tax Digital (MTD) for Income Tax?

MTD is a government initiative from HMRC aimed at digitizing tax administration in the UK. While MTD for VAT has been in place for several years, MTD for Income Tax is the next big phase, officially starting from April 2026 for self-employed individuals and landlords earning over £50,000 annually. Those earning over £30,000 will join in April 2027.

Instead of filing one annual tax return, you’ll need to keep digital records and submit updates every quarter through MTD-compliant software.

Who Does MTD for Income Tax Affect?

You’ll be required to comply with MTD for ITSA if you are:

• Self-employed (sole trader) earning more than £50,000 (from April 2026)
• A landlord with property income over £50,000
• Eventually, those earning between £30,000–£50,000 (from April 2027)

Note: Partnerships and those below the threshold are not yet required to follow MTD, but that may change in the future.

What Will You Be Required to Do?

1. Keep Digital Records
   Paper records will no longer be accepted. You’ll need to use software to track income and expenses.
2. Send Quarterly Updates to HMRC
   Instead of one annual tax return, you’ll submit four quarterly summaries of your income and expenses.
3. Submit an End-of-Year Statement
   At the end of the year, you’ll need to finalize your tax position with a final declaration.
4. Use MTD-Compliant Software
   You must use approved accounting software that integrates with HMRC’s systems.

How Harvin Tax Accountants Can Help

MTD might sound overwhelming, but we make it easy. Our team can:

• Set up and manage your MTD-compliant software
• Ensure your bookkeeping is accurate and up-to-date
• File your quarterly submissions and year-end statements
• Offer ongoing advice and support to stay compliant

We already help hundreds of clients prepare for MTD by streamlining their financial records and transitioning to digital platforms like QuickBooks, Xero, and FreeAgent.

Benefits of Going Digital

While it may seem like added work, MTD actually brings several advantages:

• Real-time financial visibility
• Reduced errors and missed deadlines
• Streamlined processes for tax submissions
• Better cash flow management thanks to regular updates