Is Your Business Ready for MTD for Income Tax in 2026?
If you’re a self-employed individual or landlord in the UK, you’ve likely heard whispers — or perhaps even groans — about Making Tax Digital (MTD). From April 2026, this isn’t just an idea being thrown around Whitehall. It’s happening. And for many, it’s a shift that brings both opportunity and anxiety in equal measure.
But let’s cut through the noise. MTD for Income Tax isn’t some abstract concept — it’s a practical change in how your income is recorded, reported and submitted to HMRC. And like it or not, it will soon become a normal part of business life.
So, what does it actually mean for you? Let’s walk through the new landscape together, with clarity, context, and a few helpful nudges to make the road ahead a bit less daunting
Who’s Affected by MTD for Income Tax?
From 6 April 2026, if your total self-employed or property income exceeds £50,000, you’ll need to comply with MTD for Income Tax. From April 2027, this threshold lowers to £30,000, pulling in a much larger number of individuals.
That includes:- — Sole traders
- — Landlords
- — Those with combined income from both sources
What Will Be Required?
Under MTD, the old way of doing things — handwritten ledgers, paper receipts in shoeboxes, or a spreadsheet handed to your accountant once a year — is no longer good enough. Instead, you’ll need to:
- — Keep digital records using MTD-compatible software
- — Submit quarterly updates to HMRC for each income stream
- — File a final end-of-year declaration by 31 January
Choosing the Right Software: It’s About Simplicity, Not Stress
Let’s be honest — choosing accounting software is rarely anyone’s idea of fun. But the reality is, the right digital tool can transform how you manage your finances. It’s not just about ticking HMRC’s boxes; it’s about removing uncertainty, saving time, and giving you more control over your business.
HMRC publishes a full list of approved MTD-compatible software, and several leading providers are already trusted by thousands of UK businesses. Platforms like Xero, QuickBooks, Sage, and FreeAgent are popular not only because they meet compliance standards, but because they’re user-friendly and designed with small business owners in mind.
If you’re nervous about jumping into the digital world, don’t worry — many of these tools offer free trials, support materials, and step-by-step guides. And if you’d prefer to stay hands-off, your accountant can take care of the setup and submissions while you carry on doing what you do best.
This move to digital isn’t about adding complexity. It’s about future-proofing your business, making your financial picture clearer, and reducing stress come tax season.. It’s about future-proofing your business, giving you a clearer view of your finances in real time.
Preparing Your Business: Start Small, Start Early
If MTD still feels like a mountain, here’s the good news: you don’t have to scale it in one go. Like most things in business, the key is starting early and taking it step by step. Here’s how to build a plan that works for you — without the panic.
1. Understand Where You Stand
Take stock of your income from self-employment and/or property. If it’s over £50,000, you’re in the 2026 rollout. If you’re over £30,000, 2027 is your deadline — but getting ahead now gives you breathing room and confidence.
2. Try Out Digital Tools Now
Choose MTD-compatible software and begin using it alongside your existing systems. Think of it as a rehearsal — no pressure, but you’re getting used to the new tools before they become compulsory. This soft transition can take the edge off any last-minute panic.
3. Speak to a Professional — It’s Worth It
While it’s possible to handle MTD requirements yourself, it’s not always wise. Getting set up properly now can prevent headaches later. At Hyams Group, we help clients set up MTD-compliant software and manage their quarterly updates, ensuring everything is submitted accurately and on time. Even if you’re comfortable with tech, it’s still smart to have a qualified accountant guide you through the process and make sure everything’s done right the first time.
Dates That Matter
| Date | Event |
|---|---|
| April 2026 | MTD starts for those earning over £50,000 |
| April 2027 | Threshold drops to £30,000 |
| 31 Jan 2027 | First final declaration deadline under MTD |
These aren’t just bureaucratic dates. They’re turning points — and being ahead of them gives you power.
Why It’s Worth Getting Ready Now
- — Avoid HMRC penalties that can easily reach into hundreds
- — Get better visibility into your profits, taxes, and trends
- — Ditch the panic of January deadlines and unexpected tax bills
Where to Turn for Support
- — HMRC’s official MTD guide
- — Your accountant (or us at Hyams Group, if you want one that actually answers the phone)
Also worth reading:
MTD for Income Tax is more than a box-ticking exercise. It’s a nudge towards clarity, organisation, and financial maturity. You don’t have to love it — but you’ll definitely benefit from embracing it early.
Need a hand getting started? Hyams Group Ltd is here to help. We support UK businesses, landlords, and sole traders every day — and we speak plain English.
Let’s make tax digital — and manageable. Together.
