Have you received a letter from HMRC about Making Tax Digital for Income Tax?
Self-employed individuals and landlords who showed a gross income of over £50,000 on their 2024-25 tax return – that’s before deducting expenses – must comply with the new Making Tax Digital for Income Tax rules from 6 April 2026. If this applies to you, you should have received a letter telling you that you’ll need to start using recognised software from the start of the 2026-27 tax year – that’s less than 2 months’ time.
If your 2024-25 tax return hadn’t been submitted at the time HMRC sent out their letters, you may have received a nudge letter instead. This will have been based on the gross income shown on your 2023-24 tax return. There is an online tool on the gov.uk website that you can use to check whether or when the new rules apply to you.
What does Making Tax Digital mean?
If Making Tax Digital (MTD) applies to you, you will need to
- use recognised software to record your income and expenses
- send quarterly updates to HMRC directly from this software
- submit your tax return by 31 January each year
If you keep manual bookkeeping records, you will need to start to use accounting software or spreadsheets. If you use spreadsheets, you (or your accountant) will need bridging software to connect your spreadsheet to HMRC.
The quarterly updates aren’t mini tax returns. You only need to send quarterly updates of your self-employed and rental income. You don’t need to report other sources of income, like employment income, bank interest or dividends.
If you use an accountant, they can submit your quarterly returns for you. They will need to charge you extra for doing this.
You can also submit your own quarterly returns. You can do this even if you use an accountant, provided you use recognised software to send your figures directly to HMRC. If this idea sounds daunting, remember that bookkeeping and accountancy software training is a tax-allowable business expense. HMRC expect you to take “reasonable care” to ensure that your quarterly figures are as accurate as possible, but they accept that there may be adjustments needed at the end of the tax year.
You’ll still need to submit an annual tax return, to confirm your self-employed and rental income figures for the year and add in any income from other sources. Even if you choose to submit the four quarterly updates yourself, you can still ask an accountant to check things over at the end of the year.
How to prepare for Making Tax Digital in April 2026
- Make sure you know your start date.
If you’re unsure, use the gov.uk website to find out if and when you need to use Making Tax Digital for Income Tax.
- If your turnover is above £50,000 you’ll need to start using recognised software from 6 April 2026.
HMRC’s website has a software finder tool, to help you to find a recognised software package that meets your needs and is MTD-ready now. There are free and paid choices, plus bridging software if you prefer to keep using spreadsheets. There is also a list of software under development.
The list of software under development isn’t complete. If you are already using software, check with the software provider directly whether they are expecting to be MTD-ready by 6 April 2026. Whilst it would be good to know whether your software provider has been recognised by HMRC before 6 April 2026, you can afford to wait a few weeks before jumping ship. The deadline for the first MTD quarterly update, covering the period from 6 April 2026 to 5 July 2026, is 7 August 2026.
- Sign up before your start date
HMRC don’t sign you up for Making Tax Digital automatically. If the new rules apply to you, don’t leave it until the last minute – sign up before your start date so everything is in place when you need it. You can sign up to MTD through your personal tax account.
Bookkeeping training and Making Tax Digital support
Springreach Training & Coaching will shortly be launching a support community for anyone who:
- Does their own bookkeeping (or would like to know how to)
- Wants to submit their own Making Tax Digital quarterly updates
We’re also busy creating for a Self-Employed Bookkeeping for Beginners course, due for release in late March.
Sign up to our mailing list if you’d like to be notified when the course and support community are launched.
What will you do when you have to submit MTD updates 5x a year? Get your accountant to do it? Do it yourself? Or a hybrid solution? #MTD