MTD IT - making tax digital for income tax

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 You’ll need to use Making Tax Digital for Income Tax if all of the following apply:

• you’re an individual registered for Self Assessment
• you get income from self-employment or property, or both
• your qualifying income is more than £50,000 based on 2025 (Starts April 2026) 
• or £30,000 based on 2026 (Starts April 2027)

• You need to submit your Self Assessment tax return for the 2024 to 2025 tax year by 31 January 2026.
• HMRC will review your return and check if your qualifying income is more than £50,000.
• If it is, HMRC will write to you and confirm that you must start using Making Tax Digital for Income Tax by 6 April 2026. If you have an agent, they can do this on your behalf.
• You or your agent must find software that works with Making Tax Digital for Income Tax and authorise it.
• You or your agent must sign up for Making Tax Digital for Income Tax.

You need to create and store digital records of your self-employment and property income and expenses using compatible software for Making Tax Digital for Income Tax.  

Software doesn't need to be expensive and there are many options. Currently, if you bank with NatWest, Mettle, RBS or Ulster Bank, you can use FreeAgent for free and be MTD IT compliant at no extra cost.

Every 3 months, your compatible software will add together your digital records for each business that you have, to create totals for each income and expense category. These summaries are known as quarterly updates.  

You need to send your quarterly updates for each self-employment and property income source to HMRC every 3 months. 

 The quarterly updates you send to HMRC will include:

• your business income and expenses from the previous 3 months
• the digital records you have already created since the beginning of that tax year and any corrections you’ve made to them

• Period 6 April to 5 July Due 5 August
• Period 6 April to 5 October Due 5 November
• Period 6 April to 5 January Due 5 February
• Period 6 April to 5 April Due 5 May 

• Contact us at MGS Bookkeeping if you need a helping hand
• This information was sourced from HMRC where you can find more information at https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax
• We will be adding more information to this page when it becomes available along with details on the most cost effective ways to be MTD IT compliant