Are you ready for Making Tax Digital for income tax?

Carly Woodland, Manager

Making tax digital for income tax (MTD IT) will involve submitting income tax information
quarterly through digital record-keeping via compatible software.

Who qualifies for MTD IT?

For individuals and landlords, it will be in two phases:

6th April 2026 – Qualifying gross income over £50,000
6th April 2027 – Qualifying gross income over £30,000

There will be further guidance issued for individuals and landlords with income below
£30,000.

The first quarterly submission will be for the quarter 6 th April 2026 to 5 th July 2026 and will be
due to HMRC by 7 th August 2026.

HMRC will be sending letters out to relevant taxpayers from April 2025 to let them know that
they will be required to comply with the new rules from the figures that were included in the
2023/24 tax returns. These letters will also outline the steps to meet the new requirements.

The requirements will not apply to:
 Partnerships (expected start date has not been announced)
 Trusts, estates, trustees of registered pension schemes and non-resident companies
(not expected to be required to join for the foreseeable future)
 Taxpayers domiciled or resident outside the UK in respect of their relevant foreign
income. These taxpayers will need to comply with MTD IT for their UK self-
employment and property income
 Taxpayers who do not have a UK national insurance number (NINO)
 Trustees of charitable trusts or the trustees of exempt unauthorised unit trusts
 Taxpayers claiming qualifying care relief (e.g. foster carers) for that source of income
only

What will you need to do if this applies to you?

For all self-employed individuals and landlords this applies from April 2026 and April 2027
and beyond, this new system will involve:

• Digital record keeping: You will need to record all income and expenses through
  HMRC digitally approved software e.g. Xero
• Quarterly updates: Information will be submitted to HMRC quarterly, so they have a clearer picture of your tax position throughout the tax year instead of after the year end
• End of period statement: This will be submitted following the four quarterly updates and finalises the income and expenses for the tax year
• Final declaration: This will be similar to the current tax return and confirm the details to HMRC
  
  The information required to be submitted in each quarterly submission will be income and expenses for set categories which are likely to be the same as those currently used for the self-employment and property income pages on the SATR.
  
  They are meant to be a simple summary of transactions not including full adjustments as with year end accounts. These adjustments can be made at the year end, there will be no declaration from the taxpayer of accuracy and inaccuracy penalties will not apply. It will be possible to resubmit quarters if errors or omissions are found after the original submission.
  
  Tax will not be paid quarterly. There are no changes to how the tax is calculated or paid.
  
  The benefits of this new process are:
•  Reducing the potential for errors
•  More up to date figures may benefit the business as whole
•  Makes the year end self-assessment return simpler and can be submitted earlier
  
  Opting out
  Individuals and landlords will only be able to opt out if they fall below the £30,000 for three successive tax years then MTD IT will not be required.
  
  Summary
  If you are a Pinkham Blair client impacted by these changes, the way we submit your self assessment tax return will change from April 2026. We will be in touch about this to ensure a smooth transition. Anyone else who this applies to and isn’t currently using digital software should start preparing for this now, so it isn’t a last minute rush for them nearer the time as these systems take time to set up and learn how to use effectively.