Making Tax Digital (MTD) for Income Tax
We will support you with your quarterly and annual responsibilities under HMRC’s new digital system.
“My first filing went like clockwork, job done.”
So what is MTD for Income Tax?
Making Tax Digital (MTD) for Income Tax is a new way for sole traders and/or landlords to report their income and expenses to HMRC.
You need to use Making Tax Digital for Income Tax if all of the following apply:
- you’re a sole trader or a landlord registered for Self Assessment
- you get income from self-employment or property, or both
- your qualifying income is more than the relevant threshold for the tax year (see next section for thresholds)
You will need to use software to:
- create, store and correct digital records of your self-employment and property income and expenses
- send your quarterly updates to HMRC
- submit your tax return and pay tax due by 31 January the following year
“I won’t lie, when Caroline first talked to me about the new quarterly filing system I had no idea and found the thought of it really stressful. I needn’t have worried because she took the time to explain how it works and that I’d have to register for it, which they took care of for me. ”
When do I have to do this?
When you need to start using Making Tax Digital for Income Tax depends on your qualifying income within a tax year.
Qualifying income is your total income from self‑employment and property. Qualifying income does not take into account any expenditure at all, only what you received.
If your qualifying income is over:
- £50,000 for the 24/25 tax year, you should have started in April 2026 — you can still sign up if you haven’t already
- £30,000 for the 25/26 tax year, you will need to use it from April 2027
- £20,000 for the 26/27 tax year, you will need to use it from April 2028
“I don’t have to join MTD until April 2027, but after discovering that I’d need to get my records together every three months, instead of once a year, I decided to do a trial run this year. Wecount prepare my figures for me every quarter but just don’t file them with HMRC yet. I’ve just completed my first quarter and I’m really glad I did as it’s given me time to get a system in place that works for me.”
WHAT EXACTLY DO I HAVE TO DO?
Choose and set-up your software. It must be compatible – HMRC does not provide software for Making Tax Digital for Income Tax. We use FreeAgent and Xero with our clients.
Sign up for Making Tax Digital for Income Tax.
Create and store digital records of your self-employment and property income and expenses.
Send quarterly updates to HMRC – you need to send your quarterly updates to HMRC every 3 months for each self-employment and property business you have. The filing deadlines are 7th August, 7th November, 7th February and 7th May.
File your self assessment tax return as usual.
“I know I could have had a go at doing this myself, but numbers really aren’t my thing at the best of times! I spoke to Wecount, they told me what they’d do, how much it would cost and just got on with it. My first filing went like clockwork, job done.”