Making Tax Digital (MTD) for Income Tax is no longer something “coming soon” – it’s now in force for the first group of taxpayers.
If you’re a sole trader or landlord, there’s one key detail that determines whether you’re affected:
👉 Your turnover for the year ended 5 April 2025
If your combined income was over £50,000, you’re now required to follow MTD rules from 6 April 2026.
This guide explains what’s changed, what you need to do, and how to stay compliant without unnecessary stress.
Who needs to use MTD for Income Tax from April 2026?
You’ll need to comply with MTD for Income Tax if:
- You’re self-employed (sole trader) and/or a UK landlord
- Your combined turnover exceeded £50,000 for the year ended 5 April 2025
If you’re unsure, it’s worth confirming now — especially if your income comes from multiple sources.
What’s changing under MTD for Income Tax?
MTD is one of the biggest changes to the UK tax system since Self Assessment began.
Instead of filing everything once a year:
- You’ll submit quarterly updates to HMRC
- You’ll keep digital records using MTD-compatible software
- You’ll still complete a final declaration after the year-end
While this may sound like more admin, many people find it easier to manage smaller, regular updates rather than one large annual task.
The 3 key requirements under MTD
1. Keep digital records
You must maintain digital records of:
- Income
- Expenses
This needs to be done using compatible software.
At Complete Cloud Accounting Solutions, we use Xero, with plans starting from £7 per month.
If you currently use spreadsheets, these can still be used alongside bridging software – although cloud software is often the simpler long-term option.
2. Submit quarterly updates to HMRC
You’ll send updates directly from your software throughout the year.
These act as regular snapshots of your income and expenses, helping you stay on track and avoid surprises.
3. Submit your tax return by 31 January
The Self Assessment deadline remains in place.
You’ll still submit a final declaration after the tax year – but with your records already up to date, the process is far more straightforward.
What should you do now? (MTD checklist)
Step 1: Confirm your position
If your turnover exceeded £50,000 for the year ended 5 April 2025, your MTD start date is 6 April 2026.
If you’re close to the threshold, it’s important to double-check now.
Step 2: Choose the right software
You’ll need MTD-compatible software that suits your business.
Consider:
- Ease of use
- Whether it supports both property and self-employed income
- Whether you want to move away from spreadsheets
- Cost vs level of support
Step 3: Get set up early
Even though MTD has started, getting set up properly now will save time later.
This gives you the chance to:
- Learn the system
- Build good habits
- Avoid rushed or incorrect submissions
How Complete Cloud Accounting Solutions can help with MTD
If this feels like a big change, you’re not alone – and you don’t have to handle it on your own.
We support sole traders and landlords by:
- Recommending and setting up the right software (including Xero)
- Making sure everything is set up correctly from day one
- Creating a simple, realistic bookkeeping routine
- Keeping records organised and compliant
- Making quarterly submissions smooth and stress-free
For many clients, the biggest benefit is peace of mind – knowing everything is under control throughout the year.
Struggling to find the time?
If you’re already busy, quarterly reporting might feel like another thing on your list.
The key is consistency:
- Keep records updated little and often
- Set aside a regular admin slot (even 30 minutes weekly helps)
- Get support where needed
Need help with Making Tax Digital?
If you’d like help getting set up for MTD, choosing software, or staying on top of your bookkeeping, this is exactly what we help our clients with.
Get in touch, and we’ll guide you through it – without the jargon or pressure.