Making Tax Digital (MTD) for Income Tax has now officially come into effect. If your income is £50,000 or more, the new rules apply, so your reporting obligations to HM Revenue & Customs have changed.
If you haven’t taken action to comply with MTD, you need to address this sooner rather than later. If you are not yet within the current income threshold, this is still an important moment. The rollout continues over the next two years, and preparing early will prevent unnecessary stress later.
If You’re Affected Now (Income £50,000+)
From this month, you are required to:
- Keep digital records of your income and expenses
- Use HMRC-compliant software
- Submit quarterly updates
- Complete a final year-end declaration
The most significant change is the move away from a single annual Self Assessment tax return. Instead, you must now submit updates every quarter, followed by a final declaration at the end of the tax year. For those now within MTD, the quarterly reporting deadlines will apply.These dates repeat each year and missing them can lead to penalties under HMRC’s points-based system. If you have not yet moved to compliant software or are still relying on spreadsheets or paper records, urgent action is required. The longer you delay, the greater the risk of missed submissions and avoidable fines.
If You’re Not Affected Yet
MTD is being introduced in stages:
- From April 2027 – individuals earning £30,000+
- From April 2028 – individuals earning £20,000+
Although you may not need to comply this year, these deadlines will arrive quickly. Waiting until the final months before your start date could mean rushed software decisions, poor system setup and unnecessary pressure. Preparing now allows you to transition gradually, test your systems and build confidence well before compliance becomes mandatory.
Getting the Right Systems in Place
MTD requires you to use approved accounting software such as FreeAgent (included in our support packages) or another compatible platform of your choice. The move to digital record-keeping is a significant shift, particularly if you have previously managed your accounts annually. This is not simply a change in submission method but a change in habit - regular bookkeeping, quarterly reviews and structured processes are now essential.
Why Acting Now Matters
Whether you are affected immediately or in the next phase, early action means reduced risk of penalties and greater clarity over your tax position throughout the year. For those already within the £50,000 threshold, compliance is required now. For everyone else, preparation should begin sooner rather than later. If you are unsure where you stand or need help implementing compliant software and managing quarterly submissions, now is the time to seek support. Find out more about Making Tax Digital requirements or speak to a member of our team.