Making Tax Digital for Income Tax
Making Tax Digital for Income Tax (MTD for IT) is a quarterly reporting system to be introduced by HM Revenue and Customs with effect from 1st April 2026. Implementation will at this stage be for sole traders and those receiving property rental income, and will be introduced in three phases as follows:
Income above £50,000 from 1st April 2026
Income above £30,000 from 1st April 2027
Income above £20,000 from 1st April 2028
This means that each calendar quarter, details of income and expenditure must be submitted to HM Revenue and Customs digitally in the form of a profit and loss account.
Initially, this is a reporting requirement only and there will be no change to the dates of payment for income tax. It will however be necessary to submit these figures via suitable accounting software.
If you do not already use an accounts package, we recommend one of the following options:
Xero
FreeAgent
QuickBooks
Sage Accounting (formerly Sage One)
Making Tax Digital is a significant change for income tax, and we will of course be happy to help you and discuss what you will need to do to comply with the new rules.