Making Tax Digital
Supporting your Making Tax Digital journey
Making Tax Digital
Making Tax Digital (MTD) is part of the government’s plans to make it easier for individuals and businesses to ensure their tax is correct and keep on top of their affairs.
MTD requires individuals and businesses to:
- keep digital records
- use software that works with Making Tax Digital
- submit updates every quarter, bringing the tax system closer to real-time
MTD encompasses Making Tax Digital for VAT and Making Tax Digital for Income Tax
Making Tax Digital for Income Tax
The way income tax self assessment returns are submitted is changing. We’re here to help you prepare.
Starting from April 2026, Making Tax Digital for Income Tax (MTD for IT) will impact sole traders, the self-employed and landlords with qualifying income over £50,000. The HMRC digitalisation initiative is aimed at making it easier for everyone to report their tax and do so correctly.
Our dedicated Digital Delivery team is here to support those impacted with selecting, implementing and setting up a compliant solution.
Get in touch for guidance on how to manage the change.
The criteria and requirements
MTD for IT will be introduced in three phases:
- from April 2026, for those with qualifying income over £50,000
- from April 2027, for those with qualifying income over £30,000
- from April 2028, for those with qualifying income over £20,000
Those falling into scope are required to maintain digital records and update HMRC each quarter, instead of the traditional annual tax return. Any return needs to be done using MTD-compatible software.
The benefits of maintaining digital records
As well as MTD for IT compliance, submitting records digitally offers benefits such as a reduced admin time, paperwork, more accurate financial records and the availability of real-time information about your finances. You can find out more about cloud accounting and the benefits to you and your business here.
Frequently asked questions
What is Making Tax Digital (MTD)?
What is Making Tax Digital (MTD)?
Making Tax Digital (MTD) is a UK government initiative designed to modernise the tax system by requiring businesses and individuals to keep digital records and submit tax returns using compatible software. It aims to reduce errors, improve efficiency, and streamline tax reporting.
When does digital tax start?
When does digital tax start?
From 6 April 2026, Making Tax Digital (MTD) will be mandatory for sole traders, self-employed individuals and landlords with an annual income over £50,000. As of April 2027, this will roll out to incomes over £30,000, then £20,000 from April 2028. The final threshold was announced in the 2025 Spring Statement.
Who does making tax digital apply to?
Who does making tax digital apply to?
You must use Making Tax Digital for Income Tax if:
- You’re registered for Self-Assessment
- You earn from self-employment, property, or both
- To begin with, your income is over £50,000. This will increase scope to over £30,000 from April 2027, and then apply to income over £20,000 from April 2028.
Making Tax Digital for VAT applies to all VAT registered businesses.
What does MTD stand for?
What does MTD stand for?
MTD stands for Making Tax Digital. MTD is a UK government initiative to modernise tax reporting by requiring businesses and individuals to keep digital records and submit tax returns using compatible software.
With you every step of the way
MTD for ITSA represents a significant change in the way those impacted manage their tax affairs. At Azets, we have been working with clients to prepare for MTD by using and partnering with market-leading technology solutions, including Xero, that meet the requirements and legislation. We are also working with HMRC as part of their Public MTD Beta testing in order to test and refine the solutions that underpin our planned MTD Services. With our breadth of solutions and extensive expertise in supporting individuals and businesses on their digital journey, we can support you with adhering to the regulations.