Making Tax Digital for Income Tax
Making Tax Digital for Income Tax is changing how sole traders and landlords manage and report their finances to HMRC. Understanding what these changes mean for you can feel complicated, but we’re here to make the process easier.
At SMH Group, our Making Tax Digital accountants can help you understand your responsibilities, choose compatible accounting software, maintain digital records and submit quarterly updates, so you can stay on top of your tax requirements with confidence.
What is Making Tax Digital?
Making Tax Digital (MTD) is a government initiative introduced by HMRC to modernise the tax system. It requires businesses and individuals to maintain digital records and use MTD-compliant software to submit tax returns directly to HMRC via an application programming interface (API).
Since April 2022, all VAT-registered businesses, regardless of turnover, must comply with MTD for VAT.
The phased rollout for Income Tax Self Assessment (ITSA) is as follows:
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From April 2026: MTD will be mandatory for individuals with income over £50,000 from self-employment or property.
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From April 2027: MTD will apply to those earning over £30,000.
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From April 2028: MTD will extend to individuals earning between £20,000 and £30,000. This update brings approximately 900,000 more taxpayers into the MTD system, earlier than initially expected.
Who Needs to Use Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax is being introduced in stages, depending on how much you earn from self-employment and property.
The following thresholds determine when you need to start using Making Tax Digital:
| Start date | Qualifying income |
| 6 April 2026 | Over £50,000 |
| 6 April 2027 | Over £30,000 |
| 6 April 2028 | Over £20,000 |
Qualifying income is your total income from self-employment and property before expenses are deducted, rather than your taxable profit. HMRC uses information from an earlier tax return to determine when you need to comply.
For further information, visit the official HMRC Making Tax Digital guidance.
How can we help with Making Tax Digital?
Our team of experienced accountants provides a range of services to help you comply with HMRC’s digital tax requirements, including:
- MTD compliance review: We review your current accounting system and procedures to ensure that you are compliant with HMRC’s digital tax requirements.
- MTD training: We provide training to help you and your staff understand MTD requirements and how to use compatible accounting software to maintain digital records and submit tax filings electronically.
- MTD software setup: We help you select and set up compatible accounting software that meets MTD requirements and integrates with your business processes.
- MTD support: We provide ongoing support to help you manage your MTD requirements, including troubleshooting, software updates, and advice on best practices.
For further guidance on planning ahead for changes to the tax system, you can also read our article on tax planning for the new tax year and key strategies to maximise allowances, which covers a range of considerations for individuals reviewing their tax position.
Why Choose SMH Group as Your Making Tax Digital Accountant?
Keeping up with changes to tax reporting can be challenging, especially when you’re busy running a business or managing rental properties.
Having an experienced Making Tax Digital accountant on your side can make things easier. We’ll help you understand what’s required, keep your digital records organised and manage your HMRC submissions.
With offices across Yorkshire and Derbyshire, our accountants provide friendly, practical support to sole traders, landlords and businesses. Whether you’re getting started with Making Tax Digital or need ongoing help, we’ll work with you to make the process as straightforward as possible.
We can also support your wider financial needs through our range of accounting services and ongoing professional advice.
Why choose our Making Tax Digital Services?
Whether you’re already using Making Tax Digital or preparing for the next stage of its introduction, our accountants are here to help.
Contact the SMH Accounting & Business Advisory team on 01142 664 432 or email info@smh.group to discuss your Making Tax Digital requirements.
