In our last post on Making Tax Digital for Income Tax (MTD), we covered the basics: what it is, who it affects, and the broad scope of change. MTD for Income Tax is now live, and if you’re a landlord or self-employed sole trader with qualifying income over £50,000, it already applies to you. Here’s where things stand and what we’re doing to get you set up.  It does not apply to Limited companies or Partnerships.

A quick recap: Does MTD apply to you?

MTD for Income Tax applies to landlords and self-employed sole traders with qualifying income over £50,000 from 6 April 2026. That’s gross income before expenses, so rental income and/or self-employment income combined, before anything is deducted.

If your income is between £30,000 and £50,000, you’ll join from April 2027. Below £30,000, you have until April 2028 (if your income is over £20,000). You don’t need to do anything yet. If you stay below turnover of £20,000, you’re likely to stay outside of MTD entirely, but watch this space.

HMRC used your 2024/25 tax return to determine which group you fall into initially. The rollout happens in stages based on your income level:

Not sure whether it applies to you? Just get in touch, and we’ll check. There are currently some exemptions from filing, too, for example, if you’re not resident in the UK or not digitally literate.

What’s actually changing

Instead of a single annual self-assessment tax return, you’ll submit a summary of your income and expenses to HMRC four times a year, once per quarter, through digital software, followed by a final declaration at the year end, which wraps everything up. That final declaration replaces your tax return, and the 31 January deadline for payment remains the same.

A few things worth knowing about quarterly submissions

These are a record of your income and expenses for the period. You don’t need to make any tax adjustments or decide whether individual expenses are allowable at this point. No tax is calculated or due on the basis of the quarterly submissions alone. The deadlines are the same for everyone each tax year: 

If something is missed or entered incorrectly, it can usually be picked up in the next submission rather than needing an amendment. And for most sole traders with income below the VAT threshold of £90,000, there’s no need to itemise expenses by category. A total figure for income and a total for expenses is all that’s needed.

The final declaration at the year end is where everything is reviewed and finalised. It will be pre-populated from your quarterly submissions, so most of the work is already done by that point. That’s also when your tax position for the year is confirmed, with the 31 January deadline and any payments on account remaining unchanged from the current system.

What we’ll be doing for you

If you qualify for MTD from 6 April 2026, you don’t need to worry about registering yourself. We’ll handle your MTD sign-up on your behalf.

We’ll also set you up with Xero, our preferred MTD-compliant software (as a Xero Gold Partner). There’ll be a monthly plan fee and a one-off set-up fee, and we’ll be in touch with the details.

From there, we’ll offer two ways of working:

• We manage your bookkeeping entirely. You simply pass us your rental receipts, expense records, or letting agent statements, and we do the rest. Where possible, we’ll connect your bank account directly to Xero so there’s minimal back-and-forth. We’ll make each quarterly submission and send you a confirmation when it’s done
• You manage your bookkeeping with our Xero setup guidance: We’ll then review your records and make the quarterly submission on your behalf.

Whichever route you take, we’ll handle the final declaration at the year end. We’ll discuss this with you.

Your first quarterly submission: what to expect

The first quarterly return we’ll file for you covers April to June 2026. The deadline for submitting it to HMRC is 7 August 2026, so there’s still time to get everything in place, but it’s worth acting now to avoid anything being rushed.

What you need to do right now

The most important thing to know is that MTD registration is not automatic. Even if HMRC has written to you, you still need to take action. The good news is that you don’t need to do this yourself. We’ll handle the registration on your behalf, get you set up on Xero, and take care of everything from there.

We’ll be in touch by email to confirm your situation and talk through the options. If you have any questions in the meantime, or if you’re not sure whether MTD applies to you, drop us a message. We’re happy to talk it through.

Remember: you don’t need to do anything yet if your income falls below the £50K threshold in the 2024-25 tax year.