Making Tax Digital for Income Tax

With just over a year to go before Making Tax Digital for Income Tax (MTD for IT) is mandated, now is the time to consider whether you will be required to comply with the new requirements from 6 April 2026.

Your start date for MTD for IT is assessed by your gross income from self-employment and property.

If you are a sole trader or run an unincorporated property business and your gross income is £50,000 or more in the 2024/25 tax year, you will be mandated into MTD for IT from 6 April 2026.

For sole traders or unincorporated businesses with gross annual income of above £30,000 in 2025/26, MTD for IT will start from April 2027. For those with above £20,000 of gross income, MTD for IT will start at a later date to be confirmed by HMRC.

From 6 April 2026, you will need to submit quarterly updates to HMRC with a final submission that includes all of your other taxable income by 31 January each year.

The quarterly update deadlines will be 7^th August, 7^th November, 7^th February and 7^th May. The deadlines will be the same for everyone who has to follow the MTD for IT rules.

It’s too early to know your 2024/25 income until your accounts or tax return have been prepared for the tax year, but your 2023/24 self-assessment tax return should give you an indication as to whether or not you’ll be mandated. 

If your qualifying income in 2023/24 was above or nearing £50,000, and you expect it to stay at around that level or increase for 2024/25, then there’s a good chance that you’ll be mandated. 

HMRC are taking this approach. They have said that they’ll use 2023/24 returns (the deadline for which was 31 January 2025) to identify which taxpayers are likely to be mandated from 6 April 2026. They will be sending these taxpayers a letter in the coming months, advising them that they will likely be mandated and explaining why.

If you receive a letter from HMRC or want to get ahead of the changes, we are here to help and discuss the next steps.

Under MTD for IT, you'll need to use compatible software to maintain your accounting records and submit quarterly digital reports to HMRC. While this might seem like a big shift, the right software can make managing your taxes easier.

We can help you choose the most suitable software and implement the required processes in a way that adds value to your business.

Get in touch with our Accounts Partner, Emma Birchall, at emma.birchall@teamjs.co.uk or on 01942 292557.