MTD for Income Tax: what’s required from April 2026?

From April 2026, Making Tax Digital for Income Tax (MTD for IT) will become mandatory for many self-employed individuals and landlords, marking a significant change in how they manage their tax affairs. The new regime is designed to modernise the tax system by requiring taxpayers to interact with HMRC through an online tax account, rather than relying solely on an annual self-assessment return.

Initially, MTD for IT will apply to individuals with qualifying income of more than £50,000 a year from self-employment and/or property. From 6 April 2027, the scope will widen to include those with income between £30,000 and £50,000. Alongside this, a new points-based penalty system will be introduced for late filing and late payments.

Qualifying income is a key concept under MTD for IT. It is broadly the total income earned in a tax year from self-employment and property, including income from multiple trades or rental properties — all before any expenses are deducted. Other sources of income reported on a tax return, such as employment income under PAYE, dividends, pensions, or partnership income, do not count towards this threshold.

Under MTD for IT, affected taxpayers will need to keep digital records of their income and expenses using compatible software. They will be required to send quarterly updates to HMRC, providing a summary of their business or property income and costs. These updates will not result in a tax liability, but an estimated tax liability for the year will be provided by HMRC each quarter based on the updates submitted. The quarterly updates are intended to give HMRC a clearer picture of income and expenditure throughout the year and encourage taxpayers to keep more timely and accurate records.

A final declaration (replacing the self-assessment tax return) will be required after the end of the tax year to finalise the tax liability for the year. At this stage, any trading deductions or other adjustments will be entered, and any non-trading income added, such as bank interest or salaries/pensions. This final declaration must also be submitted to HMRC through compatible software.

Similarly to the current system, any tax due will be payable by 31 January following the year end. Payments on account in January and July will also continue in line with the current self-assessment process.

Preparing for Making Tax Digital for Income Tax doesn’t have to be daunting. At Moore South, we work closely with self-employed individuals and landlords to help them understand their obligations, choose the right MTD-compatible software, and stay compliant with HMRC’s requirements.

Whether you need help assessing whether MTD for IT applies to you, setting up digital record-keeping, or managing quarterly submissions, our team can provide practical, tailored support.

Get in touch with Moore South today to discuss how we can help you prepare for MTD for Income Tax, and click here to visit our MTD Hub.