Introducing Making Tax Digital
What is Making Tax Digital?
Making Tax Digital, or MTD, is HMRC’s initiative to move tax reporting away from paper and spreadsheets and into digital record‑keeping and online submissions using approved software.
Instead of submitting one tax return a year, businesses and individuals will keep digital records and send regular updates to HMRC.
Who does MTD apply to?
MTD already applies to:
- VAT‑registered businesses, regardless of turnover. This is referred to as MTD for VAT
MTD for Income Tax is being extended.
As of 2026 MTD for Income Tax applies to self-employed individuals and landlords with qualifying gross income of £50,000.
Self‑employed individuals
-
The qualifying income threshold will decrease yearly bringing more self-employed individuals into the scheme:
6 April 2026: £50,000 in the 2024-25 tax year.
6 April 2027: More than £30,000.
6 April 2028: Over £20,000.
Landlords with qualifying income
The qualifying income threshold will decrease yearly, drawing more landlords into the scheme at these rates:
6 April 2026: £50,000 in the 2024-25 tax year.
6 April 2027: More than £30,000.
6 April 2028: Over £20,000.
Partnerships
MTD will be expanded to partnerships in the later phases. More details will be shared when available.
How does MTD benefit my business?
The biggest advantage of the scheme is clarity.
MTD helps you to:
- See your tax position earlier
- Reduce year‑end surprises
- Cut down on errors caused by re‑keying data
- Stay in control of your finances year‑round