Making Tax Digital for Income Tax. A Complete Guide for Landlords and Sole Traders
Making Tax Digital for Income Tax Self Assessment, or MTD for Income Tax, marks a major shift in how landlords and sole traders report income to HMRC. Importantly, these changes aim to improve accuracy, transparency, and timeliness across the UK tax system.
From April 2026, many individuals will need to keep digital records and submit income updates quarterly using approved software. Therefore, understanding how MTD for Income Tax works is essential for anyone affected.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax requires individuals within scope to take several key actions.
Firstly, taxpayers must keep digital records of their business and or property income.
Secondly, they must submit quarterly income updates to HMRC using MTD compliant software.
Finally, they must complete a digital year end declaration rather than a traditional annual self assessment tax return.
However, MTD for Income Tax does not change how or when tax is paid. Payment deadlines remain the same. In addition, VAT returns will continue to follow their existing submission process.
As a result, the biggest change for most landlords and sole traders is the move away from spreadsheets or manual records towards cloud based accounting software.
Who is affected by Making Tax Digital for Income Tax?
HMRC is introducing Making Tax Digital for Income Tax in stages. Consequently, different income levels will fall within scope at different times.
From April 2026, MTD for Income Tax will apply to:
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Landlords, including UK and overseas landlords, with total rental income over £50,000 per year
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Sole traders and self employed individuals with business income over £50,000 per year
Importantly, HMRC assesses the threshold using combined income. For example, property income may push an individual above the limit even if their self employment income alone falls below £50,000.
From April 2027, the rules will expand to include:
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Landlords and sole traders with income between £30,000 and £50,000 per year
From April 2028, HMRC will lower the threshold further to:
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Landlords and sole traders earning more than £20,000 per year
Who is not affected by Making Tax Digital for Income Tax?
At present, HMRC does not require certain entities to comply with MTD for Income Tax. These include:
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Limited liability partnerships and other partnerships not made up solely of individuals
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Trusts and estates
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Trustees of registered pension schemes
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Non resident companies
That said, HMRC may extend the rules in future. Therefore, professional advice remains important.
How Everett King supports Making Tax Digital for Income Tax compliance
As Chartered Certified Accountants and Stocktakers, Everett King actively supports landlords and business owners through the transition to Making Tax Digital for Income Tax.
Digital accounting software allows clients to maintain accurate records, monitor cash flow in real time, and reduce errors through automation. Moreover, it enables us to provide proactive advice throughout the year rather than reacting after the year end.
As a result, clients gain greater control over their finances while remaining fully compliant with HMRC requirements.
Preparing for Making Tax Digital for Income Tax with Everett King
HMRC provides general guidance on Making Tax Digital for Income Tax. However, professional oversight plays a crucial role in avoiding errors, missed deadlines, and unnecessary stress.
At Everett King, we combine technical expertise with practical digital solutions. Therefore, our clients approach Making Tax Digital with confidence, clarity, and control.
If you are a landlord or sole trader and would like advice on Making Tax Digital for Income Tax, or support with MTD compliant software and quarterly submissions, please contact Everett King to speak with Our Tax Advisers. David Everett.
