If you’re self-employed or a landlord, big changes are on the horizon. From April 2026, HMRC is rolling out Making Tax Digital for Income Tax (MTD IT) – and it’s going to affect the way you report your income.
This isn’t just another bit of red tape. It’s a whole new way of managing your tax – and it’s something you’ll want to get ahead of.
Let’s break it down.
What’s changing?
Right now, many sole traders and landlords record their income and expenses in spreadsheets, notebooks, or yes… even shoeboxes of receipts.
From April 2026, that won’t be enough. Under MTD IT, you’ll need to:
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Keep digital records of your income and expenses.
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Send quarterly updates to HMRC (instead of one tax return a year).
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File an end-of-year digital tax return that pulls together those quarterly updates.
The idea is to make tax reporting more accurate, less stressful, and easier to keep on top of. But it does mean changing the way you manage your records.
Who needs to comply – and when?
MTD IT isn’t hitting everyone at once. It’s being phased in depending on your gross income (that’s your total self-employed and property income before expenses):
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From April 2026: Gross income over £50,000
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From April 2027: Gross income over £30,000
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From April 2028: Gross income over £20,000
If you rent out property jointly, only your share of the income counts.
To determine whether the MTD IT rules will apply to you from April 2026, HMRC will look at your combined income from self-employment and property rental as reported on your Self Assessment tax return for the 2024/25 tax year (that’s the year ending 05 April 2025, with the filing deadline of 31 January 2026).
It is your turnover from self-employment and your gross property rental income (before expenses) that counts towards this threshold, not your profit after deducting expenses.
Example:
If your self-employment turnover was £32,000 and your rental income was £20,000 in the tax year to 05 April 2025, HMRC will add these together (£32,000 + £20,000 = £52,000). As this is above the £50,000 threshold, MTD IT rules will apply to you from 06 April 2026.
Key things to keep in mind
- Your tax payment deadlines aren’t changing.
- HMRC won’t sign you up automatically – you (or your accountant) need to register.
- You’ll choose whether to align your quarters with the tax year or calendar quarters – but quarterly submission deadlines stay fixed.
- Even if your income drops below the threshold later, once you’re in, you’re in (though there are exceptions).
- Smaller businesses below the VAT threshold can use simplified “three-line accounts” instead of a detailed breakdown.
What does this mean for you?
Let’s be honest: this is a big shift. If you’re used to doing everything once a year, suddenly having to report four times a year might feel daunting.
But here’s the good news: you don’t have to figure it out alone.
We’ll help you:
✅ Set up your digital record-keeping system.
✅ Stay on top of quarterly submissions.
✅ File your end-of-year return without stress.
That way, you can spend less time worrying about HMRC and more time focusing on running your business – or managing your properties.
Ready to prepare?
Change is coming, but with the right support, it doesn’t have to be overwhelming.
If you are a sole trader or a landlord, we can help you navigate this change and ensure you remain fully compliant with the new MTD IT rules.
Contact us today to chat about what MTD IT means for you and how to get prepared in good time. We’ll make sure the transition is smooth, simple, and stress-free – so you can focus on what matters most.