If you’re Self-Employed or a Landlord earning over £50,000, big changes are coming. HMRC is rolling out the next phase of Making Tax Digital (MTD) starting in April 2026, and it’s essential to be prepared.
In this blog, we’ll explain:
- Who needs to comply with MTD
- When the changes begin
- What Software you need
- How Quarterly Reporting works
- How to Prepare now
Who Needs to Comply With MTD?
MTD for Income Tax Self Assessment (ITSA) will become mandatory in two stages:
| Start Date | Income Threshold | Required Action |
| April 2026 | £50,000 or more | Start MTD reporting |
| April 2027 | £30,000 to £49,999 | Start MTD reporting |
| April 2028 | £20,000 to £29,999 | Start MTD reporting |
You must comply if:
- You’re Self-employed and earn over £50,000
- You’re a Landlord earning over £50,000 from Rental property
- You earn a combined total of £50,000+ from both sources
How HMRC Decides If You Qualify
HMRC will review your income from the 2024/25 Tax year (6 April 2024 to 5 April 2025) to determine if you must register for MTD.
Important: Your 2025/26 income won’t count towards MTD 2026 eligibility.
The 2025/26 tax return will still be submitted using the existing Self Assessment system. However, this income will be used to determine eligibility for 2027.
How Quarterly Reporting Works
Once enrolled in MTD, you’ll need to submit your Income and Expense updates every Quarter using MTD-compliant software.
Quarterly Submission Schedule:
| Quarter | Period Covered | Deadline to Submit |
| Q1 | April – June | 7 August |
| Q2 | July – September | 7 November |
| Q3 | October – December | 7 February |
| Q4 | January – March | 7 May |
At the end of the Tax Year, you’ll also need to submit a: Final Declaration
This is where your actual tax liability is calculated and confirmed.
In this video, we break down the key MTD deadlines, thresholds, and reporting obligations for UK businesses.
Which Software Do You Need?
You’ll need MTD-compatible software. HMRC no longer accepts manual submissions via Government Gateway for MTD.
Popular options include:
- QuickBooks
- FreeAgent
- Xero
- Sage
- And many more…
👉 Visit gov.uk for the full list of approved software here
Top Tip: Use a Business Bank Account
To make MTD even easier:
- Set up a business bank account
- Receive all business income into this account
- Make all business purchases using the same account
Link this account to your software, and your income and expenses will automatically feed into the system. No more spreadsheets!
How to Prepare Now
It’s never too early to prepare. Here’s what you can do:
✔ Step 1: Review Your 2024/25 Income
Get your records in order and calculate your total income for this tax year.
✔ Step 2: Choose and Set Up MTD Software
If you haven’t already, start researching MTD-compliant software and begin using it now.
✔ Step 3: Keep Digital Records
Start issuing invoices, uploading receipts, and recording expenses digitally.
Many software solutions can scan receipts and track invoices automatically.
Need Help? Grace Certified Accountants Is Here for You
Making Tax Digital doesn’t have to be scary. At Grace Certified Accountants, we help our clients:
- Set up and choose the right software
- Link their bank accounts
- Submit Quarterly updates
- Prepare and file Final Declarations
- Stay compliant without stress
🎯 Whether you’re a Landlord or a business owner, we’re here to make the transition smooth and stress-free.
💬 Book a free consultation today and let us help you get MTD-ready.
📺 Don’t forget to subscribe to our YouTube channel for more helpful tax tips.
If the numbers don’t add up… say Grace.
— Dora, Grace Certified Accountants