MTD for Income Tax: What you need to do before April 2026

April 2026 marks the next major phase of Making Tax Digital (MTD), requiring self-employed individuals and landlords earning over £50,000 annually to maintain digital records and submit quarterly updates using MTD compatible software. With just months to go, now is the time to prepare.

Who will be affected?

• Sole traders with an annual income over £50,000

• Landlords with a rental income exceeding £50,000

• Individuals with multiple income streams (e.g. self-employment and property)

This is a per-person threshold, not per business or property.

What will change?

• Quarterly submissions to HMRC via MTD software

• Digital record-keeping for all relevant income and expenses

• End-of-year finalisation replacing the traditional Self Assessment return

MTD for Corporation Tax has been scrapped, but MTD for Income Tax is still very much alive.

How to prepare

1. Plan ahead

   • Discuss a timeline with your accountant

   • Decide how much support you’ll need - full-service or hybrid

2. Choose and learn your software

   • Select MTD-compatible software that suits your income streams

   • Attend webinars or training sessions to build confidence

3. Separate business and personal finances

   • Open a dedicated business bank account

   • Use bank feeds to automate transaction imports

4. Address complex tax affairs

   • Choose software that can consolidate multiple trades or properties

   • For jointly owned property, ensure your system supports shared income reporting

     
     

The upside

MTD isn’t just about compliance, it can streamline your finances, reduce errors, and give you real-time insight into your tax position. With the right setup, quarterly submissions become routine rather than a burden.

At BlueFox Accounting, we help clients transition to MTD with clarity and confidence. Whether you're a sole trader, landlord, or both, we’ll guide you through software selection, training, and setup, so you’re ready well before the deadline.