The UK government’s Making Tax Digital (MTD) initiative is set to expand, lowering the qualifying income threshold from £30,000 to £20,000. This means that many more sole traders and landlords will be required to comply. Here’s what you need to know to prepare your business.
What Is MTD?
MTD is a government programme aimed at simplifying tax reporting through digital record-keeping and regular submissions to HMRC.
Who Will Be Affected?
• April 2026: Taxpayers with qualifying income over £50,000.
• April 2027: Income between £30,000 and £50,000.
• By 2028: Income above £20,000, including self-employed individuals and landlords.
Qualifying income includes gross earnings from self-employment and property rental.
What Are the Requirements?
1. Digital Record-Keeping: Use MTD-compatible software to maintain your records.
2. Quarterly Submissions: File income and expense summaries every three months.
3. Annual Declaration: Submit a final year-end report confirming your income.
How to Stay Ahead
• Check Eligibility: Use HMRC’s online eligibility checker.
• Choose the Right Software: Ensure it meets HMRC’s digital record-keeping standards.
• Prepare Early: Don’t wait until the deadline—start digitising records now.
Exemptions
Some taxpayers may qualify for exemptions due to digital exclusion or other special circumstances. Seek professional advice if you believe this applies to you.
Why Act Now?
With April 2026 fast approaching, early preparation can save you time, reduce stress, and help avoid potential fines. Ensuring compliance now will also streamline your tax management, making it easier to focus on growing your business.
Get in touch
Need help going digital? Contact our experts today for tailored advice on MTD compliance and choosing the best software for your business.
Contact