Making Tax Digital (MTD) for Income Tax is the next stage of HMRC’s plan to modernise the UK tax system.

Put simply, MTD for Income Tax means:

  • Keeping your transactional records digitally

  • Submitting those records quarterly to HMRC through MTD-compliant software

From April 2026, income tax returns and self-assessments will need to be digitally recorded and submitted quarterly instead of annually. While payment dates and deadlines remain the same, the way records are kept and reported will change significantly.

VAT returns will continue to be filed separately.

Not sure if this affects you? Get in touch with Everett King today and we’ll help you review your position.

 
Who is affected by MTD for Income Tax?

From April 2026

  • Landlords (UK and overseas) with rental income over £50,000 per year

  • Sole traders and self-employed businesses with income over £50,000 per year

The threshold applies to combined income. For example, if you have £30,000 of self-employment income and £25,000 of property income, you would cross the £50,000 threshold.

If your income is above £50,000, speak to us now about setting up MTD-compliant software before April 2026.

From April 2027

  • Landlords and sole traders with annual income between £30,000 and £50,000

From April 2028

  • Landlords and sole traders with annual income over £20,000

Who is NOT affected?

The following are currently excluded from MTD for Income Tax:

  • Trusts and estates

  • Trustees of registered pension schemes

  • Non-resident companies

  • Partnerships other than general partnerships with only individuals as partners

How to prepare for MTD for Income Tax

Although HMRC has delayed implementation, it’s important to start preparing now. Transitioning early will make the process smoother and ensure compliance when the rules come in.

1. Check if you’re affected
  • Identify whether you or your business will be impacted and from which date.
2. Review exemptions
  • If you qualify for an exemption (e.g. digital exclusion), apply directly to HMRC. Existing MTD for VAT exemptions will carry forward.
3. Separate your bank accounts
  • If you haven’t already, open a dedicated business bank account. This avoids personal transactions being mixed in with business ones, which will be crucial under MTD.
4. Understand tax basis reform
  • From 2025/26, the way income tax periods are assessed will change. All ITSA returns from April 2026 will use standard quarter-ends. If you don’t already have a 31 March or 5 April year-end, this could trigger a higher one-off liability. Speak to our Expert Tax Adviser, David Everett, early.
5. Choose the right software
  • Cloud accounting platforms such as Xero or QuickBooks are already preparing for MTD. If you’re already using software, check with your provider whether it will be MTD-compliant. Everett King are already set up with MTD-compliant software!
6. Get support
  • You do not have to handle the process alone. At Everett King, we can support you with as much or as little as you need.  From software to reviewing quarterly submissions directly, to managing the entire submission process on your behalf.
How Everett King can help

At Everett King, we’ve already helped many clients successfully transition to Making Tax Digital for VAT. We know the challenges that can come with adopting new systems, but also the benefits — such as reducing errors, saving time, and gaining real-time insight into your finances.

Our dedicated team works closely with cloud accounting providers, stays up to date on HMRC changes, and provides hands-on training and support to make the process simple for you.

Ready to future-proof your tax reporting? Contact Everett King today to discuss your MTD preparation.