This MTD explainer was written by Rob Webb - MTD Accountant.
Click here for Rob's MTD services.
Making Tax Digital (MTD) is a major change to how self-employed individuals and landlords report their income to HMRC. Instead of completing just one tax return each year, you’ll be required to:
The idea is to move away from last-minute tax returns and towards keeping records up to date throughout the year.
From April 2026, MTD for Income Tax will apply to:
👉 if your gross income (before expenses) from these sources is over £50,000 in the 2024/25 tax year.
This threshold is expected to reduce to £30,000 from April 2027.
So although it starts in 2026, your eligibility is based on what you’ve already earned.
To use Making Tax Digital, you will need to sign up through your HMRC online account (Government Gateway).
If you already complete a Self Assessment tax return, you will usually already have a Government Gateway account. From there, you can register for Making Tax Digital and connect your software.
You can also authorise your accounting software to link with HMRC so that your quarterly updates can be submitted directly.
There is no single “deadline” to register before April 2026, but it’s important that:
In practice, this means it’s best to get set up early, so everything is running smoothly before the first deadline.
HMRC is moving towards a more digital system to:
Regardless of opinions on the change, the key thing is understanding what you need to do and getting prepared early.
Under MTD, you'll need to:
The biggest change is not what you report — it’s how regularly you report it.
Quarterly updates are not full tax returns.
They are simply:
👉 a summary of your business income and expenses for that period.
You won't need to:
Think of it as keeping HMRC updated as you go along.
Digital records simply means keeping your records electronically rather than on paper.
This could include:
The key is that your records are kept in a digital format and updated regularly.
In most cases, yes — some form of software will make this much easier.
Software can:
While spreadsheets are allowed, many people find proper software simpler in the long run.
There are a number of accounting software options available, and the right one depends on how you prefer to manage your records.
Some of the most commonly used options include:
These platforms can connect to your bank account, help you track income and expenses, and submit updates to HMRC.
There are also some newer options linked to business bank accounts (such as Monzo and Tide), which are starting to offer tools to support Making Tax Digital. These can work well if all of your income and expenses go through that bank account, but may be more limited depending on your needs.
In general, the goal is to choose something simple that you will actually use consistently.
Yes - you can.
If you are:
…you can manage this yourself.
However, many people prefer support because:
At the moment, many people:
Under MTD:
It's a shift in habit more than a shift in complexity.
Yes — if you are self-employed under CIS and over the threshold, MTD still applies.You will need to report your full income and expenses, not just what’s left after deductions.
That is only a payment towards your tax — your full position still needs to be calculated.
If your self-employment genuinely stops before MTD begins, it may not apply — but this depends on your situation.
Then MTD won’t apply from April 2026 — but it most likely will apply next year (April 2027) if your income is similar.
Changing business structure is a bigger decision than just avoiding MTD and should be considered carefully.
No — MTD doesn’t change tax rates. It changes how and when information is reported.
This is exactly why starting early helps. Simple habits now can make a big difference later.
Leaving things until the last minute can lead to:
Starting early gives you time to:
I work with self-employed individuals and landlords to help them prepare for Making Tax Digital and manage the ongoing requirements.
This includes:
The aim is to make the whole process as straightforward and stress-free as possible.
If you’d like help understanding your situation or getting set up:
👉 You can explore my Making Tax Digital services
👉 Or get in touch to arrange a quick call
I’ll help you understand exactly what you need to do — and the simplest way to do it.