Making Tax Digital for Income Tax: What You Need to Know Before 2026

From 6 April 2026, the way many individuals report their income tax is changing. The Government’s Making Tax Digital (MTD) initiative will replace the traditional Self Assessment tax return with a fully digital reporting system.

What is MTD for Income Tax?

Making Tax Digital for Income Tax means that, instead of filing one return, taxpayers will need to:

• Keep digital records of their income and expenses using MTD-compatible software.
• Submit quarterly updates to HMRC.
• Complete a final declaration at the end of the year to confirm their tax position.

The aim is to reduce errors, improve efficiency, and give you a more accurate picture of your tax liability throughout the year.

Who Will Be Affected?

MTD will be introduced in stages, depending on your qualifying income:

• From April 2026: Income over £50,000
• From April 2027: Income over £30,000
• From April 2028: Income over £20,000

HMRC will use figures from your 2024/25 tax return to determine if you must join MTD in 2026.

What Does “Digital Record Keeping” Mean?

Under MTD, spreadsheets alone won’t be enough. You must use approved software that can:

• Record your income and expenses in real time.
• Retain digital copies of receipts and invoices.
• Connect directly with HMRC to file your quarterly updates.

We can help you choose the right system for your business and manage the process on your behalf.

Quarterly Updates and Deadlines

Instead of a single annual tax return, you’ll now provide HMRC with four quarterly submissions each year. Each one must be filed within one month and 7 days after the quarter ends:

After these updates, you’ll submit a Final Declaration (by the following 31 January) to confirm your total income, expenses, and tax liability for the year.

Preparing for MTD: Your Checklist

Here are some key steps to take now:

• File your 2025 tax return so we can assess if you need to join MTD in 2026.
• Book a review meeting with us to discuss your options.
• Choose an MTD-compliant bookkeeping system (we can guide you).
• Authorise us to manage your MTD registration and submissions.

Failing to comply with MTD deadlines can lead to financial penalties and HMRC intervention.

Get in Touch

Have questions about how MTD for Income Tax affects you? Contact us today on 0151 709 9999 or email info@amyerson.com.

You can also use the contact form on this page.