Transitioning to Making Tax Digital (MTD) for Income Tax – This April
IMPORTANT: Making Tax Digital (MTD) for Income Tax officially takes effect from the beginning of April 2026. If you are self-employed, a sole trader, or receive income from property, it’s likely that this will affect you. Today’s guide outlines key dates, the changes, who they affect, how complying with MTD will impact your business — and how Taxfile can help new and existing clients transition quickly and easily.
What’s This About?
(Transitioning to MTD for Income Tax)
Today’s guide is about the need for many people in the UK to transition to Making Tax Digital (MTD) for Income Tax, the new and regular way of reporting income digitally to HMRC. For those affected, it replaces the traditional once-a-year tax return with 5 smaller submissions spread out through the year.
Who Does MTD for Income Tax Apply To?
MTD applies to those earning a qualifying income above a certain threshold from self-employment, property, or a combination of the two.
What is the Threshold for Participation?
Those with a qualifying income over £50k will be affected first. However, that £50k threshold for obligatory entry will reduce quite quickly, meaning people with much lower incomes will also soon be affected. Those earning a qualifying annual income as low as £20k will therefore also need to comply with MTD fairly imminently.
When Do People Need to Start Complying?
For those with a qualifying annual income over £50k in the financial year 2024-25, it’s time to get on board with MTD for Income Tax right away — MTD digital record-keeping is required from early April 2026. For them, their first quarter’s digital submission to HMRC is then required no later than 7 August.
Others with lower incomes will soon follow suit, with those receiving qualifying annual incomes over £30k starting in April 2027, and those over £20k in April 2028. It’s anticipated that those in partnerships will also soon need to comply (date TBA).
While this represents a change in how tax information is reported, Taxfile’s goal is to ensure the transition is as easy as possible. We want you to feel free to continue delivering your services to customers as usual, while we handle all the MTD ‘heavy lifting’ for you.
Connect With Us to Get Started
with MTD for Income Tax
Taxfile’s tax agents are currently reaching out to new and existing clients to assist with this transition. If you are self-employed or a landlord, with an annual turnover above £50,000 and have not yet heard from your Taxfile agent — or are a new customer looking to begin your MTD journey — please contact us. We can then ensure you remain compliant.
(or contact your dedicated tax agent directly if you are an existing client).
What Do You Need to Do?
To keep your records compliant and up to date, we require your financial data in a digital format:
- Bank Statements: Please provide these as CSV or Excel digital downloads.
- Cash Transactions: If you handle cash, please provide receipts or a clear digital record.
- Business Bank Accounts: We strongly recommend using an account purely for business. Having little to no personal transactions therein will make tracking business income and expenditure much easier.
Personal Support & Reassurance from Taxfile
We understand that not everyone is comfortable with new technology. If you do not have a laptop, a home computer, or a banking app that provides downloads, please do not worry. You are more than welcome to sit with us each quarter to go through your records in person.
Ultimately, we will provide HMRC with the necessary transaction list that reflects your taxable earnings and relevant costs. We view this as a simplification; by filing on a real-time basis throughout the year, we all avoid the stress of a single year-end deadline.
Taxfile Fees
Taxfile will not be charging extra fees for this service. We will simply divide our usual annual self-assessment tax return fee into four equal instalments to help manage your cash flow.
Quarterly Deadlines
Please note the following periods and the deadlines by which you must submit your data to HMRC:
| Accounting Period* | HMRC Submission Deadline |
|---|---|
| 1 Apr – 30 Jun OR 6 Apr – 5 Jul* | 7 August |
| 1 Jul – 30 Sep OR 6 Jul – 5 Oct* | 7 November |
| 1 Oct – 31 Dec OR 6 Oct – 5 Jan* | 7 February |
| 1 Jan – 31 Mar OR 6 Jan – 5 Apr* | 7 May |
| Final submission for the completed year | The subsequent 31 January |
* (Your business accounts may be based on dates either from full calendar months e.g. starting from 1 April, or months based on the Financial Year, which starts on 6 April).
We very much look forward to hearing from — and seeing — our customers more regularly. The Taxfile team is here to support you every step of the way.
Get Started
Get in touch to start your transition to MTD for Income Tax today:
(or contact your dedicated tax agent directly if you are an existing client).