Making Tax Digital for Income Tax
Are you asking the question: Does Making Tax Digital for Income Tax affect me?
Making Tax digital for income tax will affect sole traders and landlords.
What is Making Tax Digital for Income Tax?
Starting from 6 April 2026 for total income/sales of over £50,000, this total income includes all self-employment and rental income added together.
HMRC will assess the income from your 2024/25 tax return to see if you fall under the requirements.
Key Dates:
6 April 2026: Mandatory for income over £50,000
6 April 2027: Extended to income over £30,000
6 April 2028: Extended to income over £20,000
Making Tax Digital will be introduced in stages:
Stage one – 6 April 2026:-
This will affect people with income (sales) of above £50,000 from 6 April 2026.
This is total income, so if you have 2 sole trader business or rental and a sole trader business you will need to add both of your sales to see if you are eligible.
Important: HMRC will assess your 2024/25 tax return to determine if you meet the income threshold.
Stage two – 6 April 2027
This will affect people with income (sales) of above £30,000 from 6 April 2027.
This is total income, so if you have 2 sole trader business or rental and a sole trader business you will need to add both of your sales to see if you are eligible.
Stage three – 6 April 2028
This will affect people with income (sales) of above £20,000 from 6 April 2028.
Further stages have not yet been announced but incomes below £20,000 could come in at a later date.
Who Does Making Tax Digital for Income Tax Affect?
MTD for Income Tax affects:
Sole traders with self-employment income
Landlords with rental income
Mixed income – both self-employment and rental income combined
This is total income, so if you have 2 sole trader business or rental and a sole trader business you will need to add both of your sales to see if you are eligible.
Calculating Your Total Income
Your total income includes all self-employment and rental income (Sales) added together.
Examples:
✅ Sole trader only: £55,000 self-employment income = Affected from April 2026
✅ Landlord only: £52,000 rental income = Affected from April 2026
✅ Mixed income: £30,000 self-employment + £25,000 rental = £55,000 total = Affected from April 2026
❌ Below threshold: £40,000 self-employment + £5,000 rental = £45,000 total = Not affected until 2027 (if income remains above £30,000)
What will I need to do?
Register for Making Tax Digital for Income Tax with HMRC.
Online quarterly reporting is required, this is 4 additional submissions during the year and online software will be required to submit this information.
Final submission replaces the current tax return, you will make final adjustments to the income and expenses at this point and add any other income – Currently the submission deadline of 31 January is the same as the current return.
Quarterly submission deadlines:
The quarters are cumulative so each quarter will include the year to date figures.
6 April – 5 July (deadline 7 Aug)
To 5 October (deadline 7 Nov)
To 5 January (deadline 7 Feb)
To 5 April (deadline 7 May)
You can elect to run to the end of a month e.g. 1 April to 30 June (deadline 7 Aug)
How do I prepare for Making Tax Digital for Income Tax?
Review your 2024/25 sales figures
Choose a Making Tax Digital compatible software
Set up good record keeping processes
Consider getting an accountant
Accounting software can include Xero, Sage, FreeAgent.
Good Digital record keeping can include using bank feeds, input sales invoices on your chosen software, uploading expense photos to your online software and regularly categorise transactions.
If you have multiple income sources (e.g. self employment and rental income) you may need two software licences depending on which software you use.
Our MTD services:
MTD Readiness Assessment – £250
Calculate your total income
Advice on which stage affects you
Review current record-keeping
Recommend software and processes.
Our 3 ongoing packages –
Essential – Annual submission only – you prepare record keeping and submit quarterly submissions – from £30pm
Submission only – Quarterly & annual submissions – you prepare record keeping – from £50pm
Full management – Bookkeeping, Quarterly & Annual submissions – from £150pm
Are you looking to discuss your Making Tax Digital needs?
Book a 30 min discovery call
Why Choose Green & Moore Accountancy for MTD?
✅ Mission-led focus – We work with ethical businesses ✅ MTD expertise – Early adopters helping clients since MTD for VAT ✅ Personal service – You work directly with me✅ Environmental values – We recommend sustainable processes ✅ Transparent pricing – No hidden fees, clear scope
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