From April 2026, Making Tax Digital (MTD) for Income Tax becomes mandatory for many self-employed individuals and landlords. This is one of the biggest changes to personal tax compliance in years, and it is important to begin preparing now rather than waiting until the deadline approaches.
Who is affected by the changes to personal tax compliance
You will need to follow the MTD rules if:
- You are self-employed with annual business turnover above £50,000;
- You are a landlord with gross rental income above £50,000;or
- a combination of both is over £50,000.
The threshold will later reduce to £30,000, but from April 2026 it is the £50,000 figure that applies.
Changes to personal tax compliance – what changes under MTD for Income Tax
The annual Self-Assessment tax return will be replaced by a digital system with more frequent reporting. Instead of filing once a year, you will need to:
- Keep digital records of income and expenses.
- Submit quarterly updates to HMRC.
- File a final declaration by 31 January following the tax year, confirming all other income and tax reliefs i.e. there will be five filings required each year.
Changes to personal tax compliance – steps to take before April 2026
To avoid problems, there are several hoops to jump through in the next 6 months:
- Check if you fall within scope
Confirm whether your turnover or rental income takes you over the £50,000 threshold which is measured against your 2024/25 income not a prediction of your future income. - Select suitable software
Spreadsheets on their own and paper records will no longer be acceptable. You will need to use MTD-compatible software that links directly to HMRC. This may mean upgrading your current package or choosing a new one. Spreadsheets will only be acceptable if you combine them with MTD compliant bridging software. - Register for MTD
Even if you already file online, you will need to complete the separate MTD registration process with HMRC. - Get used to quarterly reporting
Consider trialling digital record-keeping and quarterly submissions in advance, so that you are confident in meeting the deadlines. There is currently a voluntary pilot scheme in operation to let you have a go at the submissions without fear of penalties for making mistakes. - Plan for extra administration
Quarterly filing means more regular work. Think about whether you will manage this yourself or prefer us to manage the process for you.
How we can help with changes to personal tax compliance
With the changes to personal tax compliance ahead we can assess whether you are affected, guide you through the registration process, recommend suitable software, and provide ongoing support with quarterly reporting. Starting now gives you time to make the transition smoothly.
If you are unsure whether you will need to comply with MTD for Income Tax from April 2026, please contact us so that we can confirm your position and help you prepare.
