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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.

020 8761 8000 Book Appointment

(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:

020 8761 8000 Book Appointment

(or contact your dedicated tax agent directly if you are an existing client).

UK Landlords: Is Your Portfolio Ready for the Digital Tax Revolution? (Making Tax Digital for Landlords)

June 12, 2025/in Book keeping, Bookkeeping, HM Revenue and Customs, HMRC, Land and property, Landlords, Making Tax Digital, MTD, Self-assessment, Self-employed/by Taxfile

Attention UK landlords! The way you manage your property finances and report to HMRC is undergoing a major transformation. Making Tax Digital for Income Tax Self Assessment (‘MTD IT’) is no longer a distant whisper – it’s becoming a reality, and Taxfile is here to help you navigate this essential change.

Forget the headache of last-minute annual Self-Assessment tax returns! MTD for Landlords is designed to streamline your landlord tax obligations, demanding a shift to digital record keeping and MTD-compatible software. Don’t get caught unprepared – let’s explore everything you need to know about MTD for landlords and how to ensure a smooth transition.

Unpacking Making Tax Digital (MTD) for Landlords

MTD is a cornerstone of HMRC’s initiative to modernise the UK tax system, making it more efficient and accurate. For landlords, this translates into a few key changes:

Mandatory Digital Record Keeping

Bid farewell to paper trails and spreadsheets! You’ll be required to keep all your rental income and expenses in a digital format, using HMRC-recognised software. This includes meticulous details of income received, dates, amounts, sources, and all supporting documents like receipts and invoices.

Quarterly Digital Updates

The biggest shift! Instead of a single annual submission, summaries of your income and expenses are submitted to HMRC every three months through the HMRC-approved software. This offers a more real-time picture of your tax position.

The New “Final Declaration”

At the end of the tax year, a final reconciliation is submitted to HMRC, confirming the accuracy of your quarterly updates and finalising your overall tax liability. This effectively replaces your traditional annual Self-Assessment tax return.

Will MTD for Landlords Affect YOU?

(Key Income Thresholds)

The implementation of MTD for Landlords is phased, so understanding your MTD income threshold is crucial:

From April 6, 2026: If your total annual gross income from property (and any self-employment) exceeded £50,000 in the 2024-25 tax year, you’ll be mandated into MTD.
From April 6, 2027: The requirement expands to landlords with a total annual gross income from property (and any self-employment) over £30,000.
From April 6, 2028: The scheme is set to include landlords with a total annual gross income from property (and any self-employment) exceeding £20,000.

Important Consideration: This “income” refers to your gross income before any expenses are deducted. If you jointly own property, the threshold applies to your individual share of the income. Even if your income falls below these thresholds, you have the option to voluntarily sign up for MTD, allowing you to get ahead of the curve.

Finding Your Perfect MTD Landlord Software Solution

To comply with MTD IT, you absolutely must use software that is HMRC-compatible and can communicate directly with HMRC’s systems. This software will be your new best friend for:

Maintaining precise digital records of your income and expenses.
Submitting your quarterly updates to HMRC with ease.
Submitting your final declaration to complete your tax year.

While there are many options for accounting software for landlords MTD, we at Taxfile are particularly impressed with FreeAgent for its user-friendliness and powerful features.

Why We Recommend FreeAgent for Landlords:

Free access potential — FreeAgent is completely free to you while you bank with NatWest, Royal Bank of Scotland, Ulster Bank, or have a Mettle Account (just ensure Mettle is set as your primary business account within the software). This is a significant cost-saving for landlords.
Tailored for landlords — FreeAgent offers a version specifically designed to meet the unique needs of property owners, including a convenient mobile app for landlords to manage finances on the go.
Unincorporated landlord support — FreeAgent is specifically tailored for unincorporated landlords.
Automated bank imports — Say goodbye to manual data entry! FreeAgent automatically imports bank transactions, simplifying your landlord bookkeeping.
HMRC compatible & user-friendly — It’s fully recognised by HMRC for MTD and boasts an intuitive interface, making it accessible even for those new to digital accounting.
Excellent support & training — FreeAgent provides top-notch customer support and comprehensive training resources, helping you get the most out of the software.

Any optional add-ons may be chargeable.

Your Essential MTD Preparation Checklist: Don’t Delay!

MTD is a substantial change, but with a proactive approach, you can ensure a smooth transition. Here’s your action plan:

Assess your income. Confirm your gross property and self-employment income for recent tax years to pinpoint your mandatory MTD start date.
Embrace digital records NOW. Start digitising all your rental income and expenses immediately. This will make the transition to MTD software much easier.
Research & select MTD-compatible software. Explore options like FreeAgent or other HMRC-recognised landlord accounting software that suits your portfolio size and needs.
Get hands-on with your software. Familiarise yourself with your chosen software’s features for record keeping and submitting updates well before the deadlines.
Consider the MTD pilot (if eligible). Voluntarily joining the MTD for Income Tax pilot can provide invaluable experience with the system in a low-pressure environment.
Partner with Taxfile. This is where we come in! Our team at Taxfile is ready to provide expert MTD advice for landlords and guide you every step of the way.

Taxfile is Here to Help You Thrive with MTD!

Navigating new tax legislation can be daunting, but you don’t have to do it alone. Taxfile offers comprehensive support for landlords preparing for MTD:

Expert Guidance & Setup

We can answer all your MTD for landlords questions and assist with the initial setup of your chosen software.

Structured Planning

We’ll help you establish monthly goals to ensure your digital tax records are up-to-date, avoiding a last-minute rush before those crucial MTD deadlines.

Bookkeeping & Quarterly Filing Assistance

Whether you need a little help or full involvement, we can assist with your landlord bookkeeping and ensure accurate quarterly submissions.

Don’t let Making Tax Digital for Landlords become a burden. Contact Taxfile today to ensure your property portfolio is MTD-ready and positioned for continued success!

020 8761 8000 Book Appointment Contact Us

Making Tax Digital for Income Tax: Your Friendly Guide

April 23, 2025/in FreeAgent, HMRC, Income & Expenditure, Landlords, Making Tax Digital, MTD, Sage, Self-assessment, Self-employed, Software packages, Sole traders, Xero/by Taxfile

Tax. The very word can sometimes send shivers down your spine! But what if we told you there’s a way to make things a little less… taxing? Enter Making Tax Digital for Income Tax & Self-Assessment (MTD IT)!

Now, before you click away, hear us out. This isn’t about making tax more complicated. It’s actually about bringing your tax admin into the digital age, which in the long run, can save you time and reduce errors. What’s more, if you work through Taxfile, it could also save you money! Think of it as upgrading from paper maps to Google Maps for your finances!

If you work through Taxfile, it could save you money!

So, what exactly is MTD for Income Tax?

Making Tax Digital for Income Tax & Self-Assessment is a government initiative that affects self-employed individuals and landlords/ladies with a total business and property income above a certain threshold. It requires them to keep digital records of income and expenses and send quarterly updates to HMRC using MTD-compatible software*.

Who needs to get on board?

For the 2026/27 tax year, the rules apply to those with a total gross income (turnover) from self-employment and/or property exceeding £50,000 per year.
For the 2027/28 tax year, it will apply to those with a turnover greater than £30,000 and …
For 2028/29 it will affect those with a turnover of £20,000 or more.

If any of these apply to you, then MTD for Income Tax is something you’ll need to familiarise yourself with — but Taxfile can help!

Instead of one big tax return at the end of the year, MTD requires you to send updates every quarter. Think of it as breaking down the task into smaller, more manageable chunks. These updates will provide HMRC with a summary of your income and expenses for that three-month period.

Why the switch to digital?

HMRC believes that going digital will:

Reduce errors — let’s face it, manual data entry can be prone to mistakes. Digital records can help minimise these.
Make tax management easier — regularly updating your records can give you a clearer picture of your business’s financial health throughout the year, not just at the tax deadline.
Potentially reduce stress — knowing you’re keeping on top of things digitally can be a weight off your mind!

Do You* Need to Buy MTD-Compatible Software?

The key to MTD for Income Tax is using compatible software. The software allows users to keep digital records of income and expenses, submit quarterly updates to HMRC, and view tax information in one place. There are various software packages available. While some are free for those with simple needs, others offer more advanced features. HMRC estimates the additional cost to the taxpayer at £338 as a one-off administrative burden and then an additional £100 each year following. However, Taxfile has a way for you to potentially avoid such additional software costs, explained below.

“Taxfile has a way for you to avoid such software costs”

Taxfile’s Solution — What to Do

At Taxfile, with our in-house software skills for various MTD packages, we believe that the taxpayer needs only to provide us with their business transactions (income & expenditure) in a simple spreadsheet each quarter — we’ll then take on the additional responsibility. Working through Taxfile, MTD can be that simple!

“Simply supply us your quarterly income & expenditure transactions in a spreadsheet — we’ll do the rest!”

If you would like to speak to us about MTD, have any concerns, or would like some advice, we offer free consultations. We are happy to help whenever we can, so just drop into our office, book an appointment, or give us a call on 020 8761 8000.

020 8761 8000 Book Appointment Contact Us

Taxfile are accountants and tax advisors based in Tulse Hill, London SE21.

Understanding Basis Period Reform for Self-Assessment Tax in the UK

December 21, 2023/in 2023, 2023-24, 2024, Accountancy, Accountants, Basis Period, Bookkeeping, Making Tax Digital, MTD, Partnership, Self-assessment, Self-employed, Sole traders, Tax, Tax accountants, Tax calculation/by Taxfile

Are you a sole trader or in a partnership?

Do you have different accounting dates from the standard 6th of April to the 5th of Apri?

If you answered YES to both questions, some IMPORTANT changes will apply for the tax year 2023-24.

The concept of the basis period determines the time frame used to calculate taxable profits or losses for self-employed individuals, partnerships, and some trusts. It marks a departure from the traditional “current year” basis, where business profits were taxed based on the accounting period ending within the tax year. Instead, it introduces a “tax year” basis, aligning taxable profits with the UK’s standard tax year, running from 6 April to 5 April. Read more

Making Tax Digital for Income Tax Self Assessment (MTD IT). Are you ready?

September 1, 2020/in Buy to let, HM Revenue and Customs, HMRC, Income & Expenditure, Income tax, Landlords, Making Tax Digital, MTD, Self-assessment, Self-employed, Software packages, Sole traders, Tax return, Tax returns, Taxes, Taxfile/by Taxfile

The Government has now pencilled in what they regard as a firm date to implement MTD for IT, for all landlords and business owners that have an income above £10,000.

The next accounting period starting on or after 06/04/2023 that meet the above mentioned criteria will need to be compiled & submitted via MTD-compatible software.

If you are self-employed or a landlord with a turnover greater than £10k, how will MTD affect you?

1. You will need to submit a quarterly summary of your businesses income & expenses to HMRC using MTD-compliant software. Yes, you read that correctly. No longer can you do your tax return in one go, with a lot of our customers leaving it to December or even January before they come to see us. As your tax agents, we would need your business transactions every 3 months, to compile, compute, and submit through to HMRC.

The timing of the quarterly updates is determined by the accounting period of the business but typically the 4 quarters will be:

6 April to 5 July
6 July to 5 October
6 October to 5 January
6 January to 5 April

2. All your income and expenses will need to be individually logged electronically. The technical term used is that every business transaction will have an ‘electronic signature’. These signatures will then be submitted to HMRC every 3 months and you will receive an estimated tax projection for the year based on the information provided.

3. At the end of the year, any non-business information, foreign income, other income, etc is added to finalise your tax affairs and submitted using the MTD-compatible software. This replaces the need for a Self Assessment tax return. You will then have Read more

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