Making Tax Digital for Income Tax Self-Assessment kicks in this month, and a lot of self-employed people and landlords are still working out exactly what it means for them. If you’re in that camp, you’re not alone. The rollout has been talked about for years, delayed more than once, and the detail has shifted along the way.
Here’s a straight-talking look at where things stand now, who’s affected, and what you actually need to do.
What Is Making Tax Digital, in Plain English?
Making Tax Digital, or MTD, is HMRC’s push to drag the UK tax system into the digital age. The idea is simple enough. Keep your records digitally, use compatible software like Xero, QuickBooks or Sage, and submit your figures to HMRC through that software rather than typing numbers into a once-a-year tax return.
The aim is fewer errors, less last-minute chaos, and a tax system that runs in something closer to real time. Whether it actually delivers all that depends on how smoothly your business adapts.
How the Rollout Has Worked So Far
MTD hasn’t landed all at once. It’s been phased in over several years to give people time to adjust.
VAT-registered businesses have been on MTD since April 2022, including those below the VAT threshold who registered voluntarily. For many small businesses, that was the first time spreadsheets and paper records had to be retired in favour of proper accounting software.
Now it’s income tax’s turn.
Who’s in the Net From This Month?
From April 2026, MTD for Income Tax Self-Assessment applies to self-employed individuals and landlords whose combined gross business and property income tops £50,000. If that’s you, you’re in scope right now.
The threshold drops in stages from here:
- April 2027: Anyone earning over £30,000 gets pulled in.
- April 2028: The threshold drops again to £20,000.
If your gross income sits below £20,000, you’re outside the rules for now. The government hasn’t confirmed when, or if, the threshold will go lower.
A handful of exemptions also apply, including digital exclusion (age, disability, or no reliable internet), religious objections to electronic records, those without a National Insurance number, and people receiving qualifying care income such as foster carers. Non-residents completing the SA109 section have a temporary reprieve and won’t need to join before 2027.
General partnerships are still waiting for confirmation on their start date.
What Changes in Practice
The biggest shift isn’t the software. It’s the rhythm.
Right now, most self-employed people and landlords file one Self-Assessment return a year. Under MTD, that becomes four quarterly updates summarising your income and expenses, followed by a Final Declaration at the end of the year. Five submissions instead of one.
That sounds like more work, and in the early days it probably will be. But the trade-off is that you’re not scrambling in January trying to remember what happened in May. Your figures stay current, and you’ve got a much better view of what you owe before the tax year is even over.
The catch is that quarterly reporting only works if your records are genuinely up to date. Falling three months behind on the bookkeeping used to be annoying. Under MTD, it’s a compliance problem.
What This Means for Different Types of Business
If you currently run on spreadsheets or paper. This is the biggest change. You’ll need to move to MTD-compliant software, learn how to use it, and get into the habit of recording transactions as they happen rather than once a quarter at the kitchen table. It’s a real shift, but most modern accounting software is far more user-friendly than people expect.
If you’re already VAT-registered and using software. You’ve got a head start, but don’t assume you’re sorted. Income tax MTD has its own quirks, and your software needs to be compatible with the ITSA module specifically, not just VAT.
If you’re a landlord with property income. This catches a lot of people off guard. Property income counts toward the £50,000 threshold, and combined with any self-employed income, it can tip you into MTD even if neither stream alone would. Worth checking carefully.
What You Should Be Doing Now
A few practical steps if you’re in scope from this month, or expect to be soon:
Choose your software and get it set up properly. Don’t leave this until the first quarterly deadline is looming. Connect your business bank account so transactions feed in automatically. That’s where most of the time saving comes from. Get into a weekly or fortnightly habit of categorising transactions rather than letting them pile up. And map out the quarterly deadlines so they don’t catch you out.
If you’ve got an accountant, talk to them now about how the workload splits between you. Some clients want to do the day-to-day input themselves and have the accountant review quarterly. Others would rather hand the lot over. Both work, but the conversation needs to happen before the first quarter ends, not after.
Don’t Wing This One
MTD for ITSA isn’t just a software change. It’s a change to how you run your finances day to day, and getting it wrong means missed deadlines, penalties, and a year-end scramble that’s worse than the one you used to have.
If you’re unsure where you stand, or you’ve never used accounting software before, talk to a qualified accountant who handles MTD regularly. Firms like Bevan Buckland work with self-employed clients and landlords across South Wales and beyond, helping them choose the right software, get set up, and stay on top of quarterly reporting. The earlier you have that conversation, the less stressful the first year will be.
The rules have arrived. The good news is the work is the same as before, just spread out and done digitally. Once the rhythm clicks, most people find it easier than what they were doing before.
