MTD IT is a new obligation for some taxpayers to report income and expenses to HMRC digitally every three months. And it’s now only weeks away.

When MTD IT applies to you

Making Tax Digital for Income Tax (MTD IT) is being phased in from 6 April 2026 for sole traders and landlords with qualifying income over particular thresholds. From April 2026, sole traders and landlords with qualifying income more than £50,000 for the 2024/25 tax year will have to join MTD IT. On HMRC’s figures, that means some 864,000 taxpayers will need to get to grips with the new rules.

From April 2027, sole traders and landlords with qualifying income over £30,000 for the tax year 2025/26 will be expected to join MTD IT. From April 2028, it’s the turn of sole traders and landlords with qualifying income over £20,000 for the tax year 2026/27.

What you’ll need to do differently

Under the new rules, taxpayers must keep digital records of income and expenses. MTD-compatible software is then used to send updates of income and expenses to HMRC every three months. In addition to these quarterly updates, there is an end-of-year tax return, also filed via MTD software.

HMRC letters and what to do next

If you are affected in 2026, HMRC should have written to you confirming that you must join MTD IT. If not, you should expect to receive one in the coming weeks. The letter includes a QR code, which you can scan to access further information. You can also find out more simply by visiting here.

Concerned about what an upcoming HMRC letter on MTD IT could mean for you? We’ll explain the requirements and guide you through the steps you need to take.

Software, systems and support

MTD IT represents a major change in the way you interact with HMRC. It is important that you have the right software in place, and are confident using it. Alternatively, you will need to arrange for a competent third party to maintain the records and make the submissions on your behalf. The need to send updates to HMRC each quarter is something that moves record keeping and reporting very much closer to real time.

How we can help

We are here to help support you through your entry to MTD IT. Click below to get in touch with us.

Let’s Talk

HMRC presses on with roll-out of Making Tax Digital for Income Tax (MTD IT) – but changes plans for Corporation Tax.

MTD IT is now well on the horizon, with updated draft legislation published over the summer. Significantly, HMRC also published a Transformation Roadmap, highlighting the fact that digital self-serve is very much the direction of travel. According to this document, ‘HMRC will look very different by 2030. Almost all our straightforward customer queries will be handled digitally or automatically with at least 90% of customer interactions being digital’.

New rules for sole traders and landlords

MTD IT is the new way for income and expenses to be reported to HMRC. Under these mandatory new rules, sole traders and landlords must send updates, filed online using specific software, to HMRC every three months.

The change is being rolled out in phases from 6 April 2026, depending on the level of what is called ‘qualifying income’. Entry to MTD IT is mandatory for sole traders and landlords:
• From 6 April 2026 if qualifying income is over £50,000 for the 2024/25 tax year.
• From 6 April 2027 if qualifying income is over £30,000 for the 2025/26 tax year.
• From 6 April 2028 if qualifying income is over £20,000 for the 2026/27 tax year.

And other taxpayers

The government has also said that it will ‘continue to explore how we can best bring the benefits of digitalisation to a greater proportion of the four million sole traders and landlords who have income below the £20,000 threshold’. This appears to leave the door open for future changes affecting those below the £20,000 threshold.

Let’s Talk

Despite last-minute delays in the past, there is a confidence that this time MTD IT really will happen. High-level contact with HMRC by the tax and accountancy professional bodies tends to confirm this, and with MTD IT expected to reduce error and help close the tax gap, it seems highly unlikely that the government will back down now. Another strong driver is the fact that MTD IT sits on HMRC’s new Enterprise Tax Management Platform, and moving taxpayer data onto this platform is fundamental to modernising HMRC’s own digital systems.

What’s involved: MTD IT has three key components:

Who is impacted and when: From April 2026, MTD IT will be mandatory for self-employed individuals and landlords, with what’s called gross qualifying income of more than £50,000 from those sources.

From April 2027, it will be mandatory where such income is more than £30,000, and from April 2028 for those with income more than £20,000.  

Not yet in scope: Partnerships are expected to come into MTD IT at a later (unspecified) date.

Exemptions and deferrals: Limited exemptions apply either automatically or with notification to HMRC; we can help you ascertain if any of these apply to you. In addition, certain taxpayers will have a deferred entry to MTD. These include individuals who submit the residence/remittance basis pages with their tax return (SA109), who will not be required to join MTD IT until April 2027.    

Moving ahead: MTD IT is a major change. It impacts the way you interact with HMRC, and how often you interact with HMRC. It also revolutionises the yearly timetable for accounts preparation. The scale of the change can’t be over emphasised, and it will be wise to start making some key decisions now.

If MTD IT is going to apply to you, we will be in touch to discuss what’s needed in more detail. We can also talk through the options for record keeping, and quarterly filing, so you can decide how much input you would like us to have, and how much you want to tackle yourself. We look forward to working with you to find the MTD IT solution that’s right for you.