The Government’s Making Tax Digital (MTD) for Income Tax (IT) is rapidly approaching.
It is crucial that you are ready and fully understand how these changes could impact you as the phased rollout of this new tax reporting regime begins in April 2026.
For individuals completing Self-Assessment tax returns, the way you report and communicate your income will change, making early preparation essential.
When do the new rules take effect?
From 6 April 2026, anyone completing a Self-Assessment tax return with an annual turnover or gross income exceeding £50,000 must comply with the new MTD for IT legislation.
The threshold will gradually reduce over time, falling to £30,000 from April 2027 and then to £20,000 from 6 April 2028.
Your tax return for the 2024/25 tax year will determine when the MTD rules apply to you.
If you are likely to be affected from April 2026 and haven’t yet made preparations, now is the time to speak to our team.
What will I need to do?
Once you are required to comply with MTD for IT, you will need to keep digital accounting records, as paper records will no longer be accepted.
It is recommended that you integrate cloud accounting software into your processes to ensure accurate reporting.
Although it will still be possible to use spreadsheets alongside bridging software, using HM Revenue and Customs (HMRC) compliant software is strongly advised.
In addition to maintaining digital records, you will need to submit quarterly updates to HMRC and confirm your final tax position at the end of each tax year.
These updates must be submitted either through the HMRC app or via an external agent, such as an accountant, who can handle the filings on your behalf.
Act now and prepare
Preparation is critical because you will need to adapt your Self-Assessment processes to handle quarterly reporting and become familiar with using software and technology for submissions to HMRC.
Contact our team today to start preparing for MTD for Income Tax and ensure your business stays compliant.
