Making Tax Digital — for self-employed and landlords
Making Tax Digital — for self-employed and landlords
From April 2026 most self-employed people and landlords with combined income over £50,000 must keep digital records and submit quarterly updates to HMRC. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. We help clients get ready, stay compliant, and treat the change as a chance to clean up — not a chore.
Who is affected and when
MTD for Income Tax (often called MTD for ITSA, or just “MTD”) applies to self-employed people, sole traders and landlords who file a Self-Assessment return. It does not apply to limited companies — they have their own filing regime. The phased introduction is:
- From April 2026 — combined self-employment + property income above £50,000 (gross, not profit)
- From April 2027 — combined income above £30,000
- From April 2028 — combined income above £20,000 (announced October 2024 Budget)
- Below £20,000 — no MTD requirement at present, though that may change later
Combined income means turnover plus rental income, not profit. So a sole trader with £40,000 of business turnover and a landlord side with £15,000 of rent is in scope from April 2026 (£55,000 combined).
What MTD actually requires
Digital records
Keep your income and expenses in MTD-compatible software (or a spreadsheet with a bridging tool). Receipt photos via apps like Apron count.
Quarterly updates
File a summary of income and expenses every three months — not full accounts, just running totals. Deadlines are 7 August, 7 November, 7 February, and 7 May.
Final declaration
Once a year, submit a “final declaration” by 31 January — replaces the old Self-Assessment return. This is where reliefs, allowances and adjustments are made.
What we do for you
- Check whether you are in scope, and from which date
- Set up Xero or another MTD-compatible system tailored to you (sole trader, landlord, or both)
- Run Apron or similar receipt-capture so paperwork is digital from day one
- Pull your bank feeds and reconcile monthly so quarterly submissions take minutes
- File the four quarterly updates and the final declaration on your behalf
- Watch for the tipping points (£90k VAT threshold, going limited, exit on a sale)
- Train you (or your bookkeeper) so you understand what is happening, even if we do the filings
- Handle penalty appeals where HMRC’s new points-based system gets it wrong
All on a fixed monthly fee — no per-submission charges, no surprise bills in January.
Frequently asked questions
Am I in scope if I have a small side-hustle?
It depends on combined gross income across all sole-trade and property activities. Below £20,000 you are out of scope (for now). Above £20,000 you will be in scope from April 2028. Use our free checker if you are unsure.
What if I have both self-employment and rental income?
You file a single set of quarterly updates covering all in-scope income, but separated by source — one set of figures for the trade, one for the property business. We handle the splits and submissions for you.
Do I have to use Xero or specific software?
You need MTD-compatible software, but you have a wide choice — Xero, QuickBooks, FreeAgent, or even a spreadsheet with a bridging app. We use and recommend Xero for nearly all clients because it integrates well with Apron, payroll, and the bank feeds.
What about my partner’s income?
Each individual is assessed separately for MTD. If you and a partner co-own a rental property, you each look at your own share of the gross rent. Joint-property income is split per ownership share for the threshold test.
What are the penalties for getting it wrong?
A new points-based penalty system applies. Late quarterly updates earn points; once you accumulate four (within a 24-month period) a £200 penalty kicks in, with further £200 penalties for each subsequent late submission. Late payment penalties are separate and rise the longer the bill is overdue.
I am a landlord with one rental property. Do I really need this?
If your rental income (alone or combined with self-employment) exceeds the threshold for your year, yes. A single buy-to-let on £15,000 a year is below all current thresholds — but if you have multiple properties, or any sole-trade income alongside, the total can quickly cross the line.
Want this off your plate?
The first MTD quarterly update is due 7 August 2026 for in-scope clients. Now is the time to get the bookkeeping clean, the software set up, and the process running. Book a free call and we will scope it.