Making Tax Digital for Income Tax – What It Means for You

From 2026, millions of people with income outside PAYE will need to follow new rules under Making Tax Digital (MTD) for Income Tax. That means if you’re self-employed or a landlord earning over £50,000 a year (and from 2027, over £30,000), you’ll need to keep digital records and send updates to HMRC throughout the year — not just once with your Self Assessment.

Why the Change?

The government says MTD will make tax simpler and reduce errors. Instead of one big return, you’ll submit quarterly updates plus a final annual statement. For HMRC, this means fewer mistakes. For taxpayers, it should mean fewer surprises — but only if you’re prepared.

What It Means in Practice

• Digital record-keeping – you’ll need compatible accounting software to track income and expenses.

• Quarterly reporting – updates to HMRC every three months instead of once a year.

• Final adjustments – one annual declaration to confirm figures, just like Self Assessment now.

  
  

Common Concerns

• More admin? Quarterly updates mean more frequent submissions, but good software can make it easier.

• Costs? There may be a small investment in software, but it could save time and help with cash flow planning.

• Getting ready? Starting to use digital tools now makes the transition smoother.

  
  

Looking Ahead

The shift to MTD is one of the biggest tax changes in a generation. The earlier you adapt, the less disruptive it will feel. Think of it as an opportunity to modernise how you manage your finances — and to stay ahead of the curve.