Making Tax Digital (MTD) for Income Tax became mandatory from 6 April 2026 for sole traders and landlords with combined gross income from self-employment and property exceeding £50,000, based on their 2024/25 tax return. Qualifying income is measured before expenses are deducted. 

The scope of MTD will widen in future years:

  • From April 2027, it will apply to those with qualifying income above £30,000.
  • From April 2028, it will apply to those with qualifying income above £20,000. 

Under MTD, affected taxpayers must keep digital records and submit quarterly updates to HMRC using compatible software, together with an end-of-year submission. 

HMRC has recently announced that they will begin automatically signing up taxpayers from September 2026 where they believe the taxpayer should already be using MTD but has not yet registered. The sign-up process will be carried out in stages and could affect around 294,000 taxpayers. HMRC says that they will notify the taxpayer once they have been signed up.

If you receive a letter or digital notification from HMRC, do not ignore it. You should review your MTD status immediately, check that HMRC’s information is correct, and ensure you have suitable MTD-compatible software in place. If you believe you qualify for an exemption, or HMRC’s records are incorrect, action should be taken promptly. 

If you are unsure whether MTD applies to you, need help selecting software, or have received an HMRC sign-up notification, please contact us. We can review your position, ensure you meet your obligations and help you establish a compliant and efficient MTD process.