If you’re self-employed or a landlord in Northern Ireland, the way you report income to HMRC is changing — and for many people the change has already begun. Making Tax Digital for Income Tax (often shortened to MTD for Income Tax) replaces the once-a-year tax return with digital record-keeping and quarterly updates. Here’s what it means in plain terms.
Who has to comply, and when
MTD for Income Tax is being introduced in stages, based on your gross income:
- From 6 April 2026 — if your qualifying income is over £50,000
- From 6 April 2027 — if it’s over £30,000
- From 6 April 2028 — if it’s over £20,000
“Qualifying income” is the part that catches people out. It means your gross income — your turnover before any expenses — from self-employment and from property combined. It does not include wages taxed through PAYE, dividends, or savings interest. So if you turn over £40,000 from a trade and receive £12,000 in rent, your qualifying income is £52,000 and you’re in from April 2026, even though neither source crosses the threshold on its own.
What actually changes
Three things. You’ll need to keep your records digitally using HMRC-compatible software; you’ll send HMRC a summary update every quarter rather than once a year; and you’ll confirm your figures with a final declaration after the year end. A new points-based penalty system applies for late submissions and late payments, so staying on top of deadlines matters more than ever.
How to prepare now
Don’t wait for the letter from HMRC. Check whether your most recent tax return puts you over the threshold, choose compatible software early, and get into the habit of keeping records as you go rather than in a year-end scramble. Good bookkeeping is now not just sensible — it’s the law.
This is exactly the kind of change we guide clients through every day. If you’d like help choosing software, getting your records MTD-ready, or simply understanding whether this applies to you, talk to us about (our bookkeeping services) and (our tax services), or (get in touch) for a free chat.