From April 2026, the way self-employed individuals and landlords report their income will change forever. HMRC is introducing the next stage of Making Tax Digital (MTD), bringing Income Tax Self-Assessment (ITSA) into the digital age.
For many, this will feel like a big shift. At FMY Accountants, our role is to make sure the process is smooth, simple, and even beneficial for your business. Here’s everything you need to know.
Who Will Be Affected and When?
The rollout is based on your total gross income from self-employment and/or property:
- 6 April 2026: Income above £50,000 (from 2024/25 tax year).
- 6 April 2027: Income above £30,000 (from 2025/26 tax year).
- 6 April 2028: Income above £20,000 (expected).
Important: HMRC looks at your total income per individual, not per business or property. So if you have multiple trades or properties, all are added together.
Joint property owners must each report their own share. Partnerships and trusts are excluded for now, but are likely to be included later.
What Will Change Under MTD?
1. Digital Record Keeping
Paper records will no longer be accepted.
Income and expenses must be stored in MTD-compatible software (e.g. Xero, QuickBooks, Sage) or via compliant spreadsheets with bridging software.
Each income stream (self-employment vs property) must be recorded separately.
Keeping a dedicated business bank account will make this much easier.
2. Quarterly Submissions
You’ll submit income and expense summaries every three months.
Submissions are due within one month and six days of the quarter’s end.
Each income source requires its own quarterly update.
Tax payment deadlines stay the same — 31st January after the tax year.
3. Year-End Final Declaration
A final annual submission confirms your tax position.
Here you’ll add adjustments, other income (pensions, dividends), and reliefs.
The deadline remains 31st January after the tax year.
What This Means for You
The benefits of MTD are real:
- Fewer errors and less last-minute stress.
- Clearer visibility of your business finances.
- More time to plan for tax bills.
But it also means a new way of working. If you’re used to paper ledgers or ad-hoc spreadsheets, now is the time to modernise.
Choosing the Right Software
To comply with MTD, you’ll need HMRC-approved software:
- All-in-one accounting software: Digital records, quarterly updates, and returns all in one place.
- Bridging software: A simple connector between your spreadsheets and HMRC.
The right choice depends on your business size, income streams, and how hands-on you want to be. At FMY, we’ll help you select and set it up.
How FMY Accountants Can Help
With over 20 years of experience, we know change can feel daunting. Our job is to take the pressure off you and make sure you’re always ahead of deadlines.
We’ll:
Check your income to confirm when MTD applies.
- Review your record-keeping and recommend the right software.
- Handle quarterly submissions and your year-end declaration.
- Apply for digital exemptions if you qualify.
In short, we’ll manage the details so you can stay focused on running your business.
Start Preparing Now
Although 2026 may seem far away, the best time to prepare is now. Early planning means no last-minute rush and no risk of penalties.
Contact FMY Accountants today at info@fmyaccountants.co.uk for tailored advice on Making Tax Digital and a personalised plan for your business.