If your business, self-employment, or rental income tops £50,000, 2026 brings a big change. From 6 April 2026, Making Tax Digital (MTD) for Income Tax became mandatory for many sole traders, landlords, and partnerships in the UK.

This shift moves away from the old annual Self Assessment tax return. Instead, you will keep digital records and send updates to HMRC four times a year. It aims to make tax more straightforward and reduce mistakes, but it requires some preparation.

Many people feel unsure about the switch. The good news is that with the right approach, it does not have to be overwhelming. Here is a clear guide to the main steps.

Understand If You Are Affected

First, check your qualifying income. This includes gross income from self-employment and property before deducting expenses. It excludes things like wages from a job or dividends.

HMRC looks at your income for the 2024 to 2025 tax year to decide if you start in April 2026. If it was over £50,000 from these sources, you need to use MTD from 6 April 2026.

The threshold drops later. It goes to £30,000 from April 2027, and then to £20,000 from April 2028. If your income sits near these levels, keep an eye on your figures.

Note that MTD for VAT is separate and already applies if you are VAT registered. This new phase focuses on Income Tax Self Assessment.

Step 1: Register for MTD

You need to sign up with HMRC before the start date. Most people can do this through their existing Government Gateway account.

HMRC provides a simple online tool to check your eligibility and guide you through registration. Do this early to avoid last-minute stress. Once registered, you get access to the new digital reporting system.

Step 2: Choose Compatible Software

This is one of the most important parts. You must use HMRC-recognised software to keep records and submit updates.

Options range from full accounting packages to bridging software that works with spreadsheets. Some are free for basic use, while others have monthly fees depending on features.

Pick something that fits your business size and how you work. Look for easy bank feeds, simple expense tracking, and clear quarterly summaries. Test a few to see what feels right.

Many find that good software saves time overall. It handles calculations automatically and flags potential issues before submission.

Step 3: Set Up Digital Record Keeping

Start keeping income and expense records digitally from day one of the new tax year.

You do not need to change everything overnight, but move away from paper receipts or basic spreadsheets that do not link to MTD software.

Scan receipts, link bank accounts, and categorise transactions regularly. This habit makes quarterly updates quick rather than a chore.

HMRC requires digital links where possible, such as direct bank connections, to reduce errors.

Step 4: Prepare for Quarterly Updates

From April 2026, you submit four updates per year instead of one big return.

The deadlines are usually:

  • 31 July (for April to June)
  • 31 October (July to September)
  • 31 January (October to December)
  • 30 April (January to March)

These are summaries of income and expenses. You still pay tax as normal, often twice a year.

At the end of the year, you file a final declaration to confirm everything. This replaces the traditional Self Assessment return for your qualifying income.

Step 5: Review and Get Support

Talk to an accountant if you use one. They can help choose software and handle submissions.

If you run your own books, build in time to learn the system. HMRC offers guidance, and software providers have support teams.

Stay informed through official HMRC updates, as rules can evolve.

How Tools Can Help Simplify Compliance

Staying on top of company information and filings is part of running a smooth business. Tools that give quick access to Companies House records can save time when checking details or updating records.

For instance, the Companies House on the Go app lets you search company info, view filings, and track changes right from your phone. It is handy for busy owners who need fast, reliable data without logging into full portals every time.

You can download it for iOS here: https://apps.apple.com/us/app/uk-companies-house-on-the-go/id6743302358

Or for Android: https://play.google.com/store/apps/details?id=com.companiesonthe.go

Apps like this fit well alongside your MTD software, helping you manage admin efficiently.

 

If you prepare properly, you will be ready when April arrives. Good luck with the change.