With just a month to go until the new Making Tax Digital (MTD) is introduced, now is the time to get prepared.
Are You Affected?
MTD for Income Tax is being introduced in phases.
- From April 2026, individuals earning £50,000 or more will need to comply.
- From April 2027, the threshold reduces to £30,000
- From April 2028 it will apply to those earning £20,000 and above.
If you fall within these income levels, you will need to change the way you report to HM Revenue & Customs.
What Will Change?
The biggest shift is moving away from a single annual Self Assessment tax return to a system of quarterly digital reporting. Under MTD, you will be required to keep digital records of your income and expenses throughout the year and submit quarterly updates using HMRC-approved software. At the end of the tax year, you will also file a final digital declaration. For many self-employed individuals, this means adjusting to multiple deadlines each year instead of just one. While the aim is to improve accuracy, the practical reality is more administration and a greater risk of missed deadlines if proper systems are not in place.
The Risks of Leaving It Too Late
HMRC will operate a points-based penalty system for missed submissions. Although there may be a short period of leniency as the system is introduced, penalties will apply once thresholds are reached. Delaying action increases the likelihood of errors, late submissions and unnecessary stress.
How We Can Support You
MTD requires the use of compliant accounting software such as FreeAgent, which is included in our comprehensive support package, though you can use another compatible platform of your choice. For those used to spreadsheets or paper records, this can feel like a significant adjustment. Our role is to make that transition straightforward and manageable. We help you select and implement the right software, guide you through recording your income and expenses correctly, and provide the support you need to feel confident using the system. Beyond setup, we continue to work with you throughout the year, monitoring deadlines, preparing quarterly submissions and ensuring everything is filed accurately and on time. You won’t have to worry about whether you’ve missed an update or completed something incorrectly, we manage the process with you every step of the way.
Take Action Now
Making Tax Digital is approaching quickly. The earlier you act, the easier the transition will be. By putting the right systems in place now, you reduce stress, avoid last-minute panic and ensure full compliance from day one. If you would like guidance on how MTD affects you or support getting set up properly, now is the time to start the conversation. Read our guide to Making Tax Digital or get in touch to find out more about our support package.