Making Tax Digital (MTD) is transforming how individuals and small businesses manage their tax affairs in the UK. If you’re self-employed or a landlord, understanding MTD now will help you stay compliant and avoid future penalties.
What is Making Tax Digital?
Making Tax Digital is HMRC’s initiative to modernise the UK tax system. It aims to make tax administration more accurate, efficient and easier to manage through the use of secure digital record-keeping and online submissions.
From April 2026, MTD will apply to:
- Self-employed individuals with business income over £50,000 per year
- Landlords with property income over £50,000 per year
Those below the threshold can continue using Self Assessment in the usual way — for now.
Key Requirements under MTD
1. Digital Record Keeping
You’ll be required to maintain digital records of your business or property income and expenses. Traditional paper records will no longer meet HMRC’s requirements.
2. Quarterly Updates
Instead of one annual tax return, you’ll submit quarterly updates of your income and expenses directly to HMRC using compatible software.
3. End-of-Period Statement (EOPS)
At the end of each tax year, you’ll submit a final declaration (EOPS) to confirm your figures and finalise your tax position.
Compatible Software
You’ll need MTD-compatible software to record income and expenses and send updates to HMRC. Popular options include:
- Xero
- QuickBooks
- FreeAgent
- Sage
These platforms can automate much of the process, reducing manual errors and giving you real-time visibility of your tax position.
Benefits of MTD
While the change may feel daunting, MTD offers genuine benefits:
- Less admin – Digital records mean less paperwork and easier organisation.
- Fewer errors – Automated calculations reduce mistakes.
- Real-time insight – Quarterly submissions give a clearer view of your tax liability throughout the year.
- Better decision-making – Accurate data helps with cash flow and financial planning.
How We Can Help
At Clean Accounts, we make the transition to Making Tax Digital simple. Our team can:
- Identify if and when you need to register for MTD
- Recommend the best compatible software for your business or property income
- Set up and configure your digital record-keeping system
- Provide ongoing support and training
- Manage your quarterly submissions and year-end statements
Get Ready Now
MTD for Income Tax starts in April 2026, but preparing early means a smoother transition.
Next Steps:
- Check if your annual business or rental income exceeds £50,000
- Choose an MTD-compatible software solution
- Start keeping your records digitally
- Get professional guidance to ensure full compliance
Need help getting MTD-ready? Contact us today for a free consultation — we’ll guide you through every step of the process and make sure you’re ready well before the 2026 deadline.
Tax rules change regularly. This article provides general information only. For advice specific to your circumstances, please contact us.