Making Tax Digital has arrived

Making Tax Digital for Income Tax is one of the biggest changes to Self Assessment in recent years, and from 6 April 2026 it became mandatory for some sole traders and landlords.

If you are registered for Self Assessment, receive income from self-employment or property, and had qualifying income of more than £50,000 in the 2024/25 tax year, you are now required to use Making Tax Digital for Income Tax unless an exemption applies. 

Instead of relying entirely on an annual Self Assessment process, those within the scheme must use compatible software to maintain digital records and submit quarterly updates to HMRC.

What does Making Tax Digital involve?

Businesses and landlords within the scheme need to:

• Keep digital records of their income and expenses.
• Use software that is compatible with Making Tax Digital.
• Send quarterly summaries to HMRC.
• Keep their digital records accurate and correct errors when they become aware of them.
• Complete and submit their annual tax return using their Making Tax Digital software. 

The quarterly updates are not additional tax returns. They are summaries of the income and expenses recorded within your accounting software.

HMRC is now signing people up

There is another important development for September 2026.

HMRC has begun automatically signing up people who appear to meet the criteria for the 2026/27 tax year but have not yet registered themselves.

Where possible, it may still be preferable to complete the registration yourself or through your accountant, as this provides an opportunity to check that HMRC has the correct details about your income sources and circumstances. 

More businesses will be included

The scheme is also being expanded over the next two years.

The current timetable is:

From April 2026: qualifying income over £50,000
From April 2027: qualifying income over £30,000
From April 2028: qualifying income over £20,000 

That means businesses which are not currently required to join should still consider whether their bookkeeping systems are ready.

Is your bookkeeping ready?

The move towards digital reporting makes accurate, up-to-date bookkeeping increasingly important.

Keeping records organised throughout the year not only helps with Making Tax Digital compliance; it also gives business owners a clearer understanding of cash flow, profitability and the overall financial health of their business.

If you are unsure whether Making Tax Digital applies to you, or whether your current accounting software and bookkeeping processes are suitable, now is a good time to review them.