Our Guide to Making Tax Digital (MTD)
Welcome to our guide of Making Tax Digital (MTD) for 2026. The below is based on our interpretation of the current HMRC MTD guidance, which may change.
What is Making Tax Digital?
Making Tax Digital (MTD) is a government initiative to transform the tax service. It will be mandatory to keep digital records.
Who Does it Affect?
This will affect the self-employed and landlords (with UK and/or foreign property) with qualifying incomes over:
£50,000 from April 2026.
£30,000 from April 2027.
£20,000 from April 2028 but to be HMRC confirmed.
Partnerships and limited companies are currently exempt.
What Are The Main Changes?
There is one main change with the new scheme. Your annual tax return is to be replaced by:
Quarterly updates to HMRC via MTD compatible software.
A final declaration.
Qualifying Income
This is the total gross income (turnover) that you receive in a tax year before you deduct any expenses or deductions from self-employment and/or property.
For example:
£20,000 from rental income.
£31,000 from self-employment.
Qualifying income is £51,000 so you meet the mandatory MTD requirement.
When applying the qualifying income HMRC will look at the tax return for the previous tax year. In effect the figures for the 2025/26 tax year.
Jointly Owned Property
For jointly-owned property:
If you receive income from a jointly owned rental property it’s only your share that counts.
Will only need to submit the gross income in your quarterly update.
Expenses to be declared in the final declaration.
Quarterly Updates
You will need to file quarterly updates by the 7th of the month following the below quarterly periods.
6th April to 5th July
6th July to 5th October
6th October to 5th January
6th January to 5th April
You can elect to use calendar year quarters instead (it may be relevant to your self-employment/property) and submit information to 30th June, 30th September, 31st December and 31st March.
Kindly Note: If you have income from self-employment and rental property you will need to submit separate quarterly updates for each so eight quarterly updates in total. Four for self-employment and four for the property.
Tax Payments
Tax payments remain the same.
Payments on account are due by the 31st January and 31st July.
Balancing payment by 31st January.
And Finally…
Final declaration
You still need to disclose any other relevant income such as investment and savings you may have.
Do not forget to make any adjustments and claims for tax relief.
This is due on 31st January following the tax year, along with payment.