The way self-employed people and landlords manage their taxes is changing. Making Tax Digital for Income Tax (MTD for IT) is being introduced to bring the tax system into the digital age, and if you earn over £50,000, you’ll need to follow the new rules from April 2026. Those earning between £30,000 and £50,000 will need to comply from April 2027, with further changes expected later.
If that sounds a little daunting, don’t worry – we’re here to break it down and help you get prepared.
Who Will Be Affected?
MTD for IT applies to self-employed individuals and landlords, but not all at once. Here’s what the timeline looks like:
- April 2025 – A public beta will open for self-employed individuals and landlords earning £50,000 or more. This gives people the chance to try out the system before it becomes mandatory.
- April 2026 – If you’re self-employed or a landlord earning above £50,000, you’ll need to start using MTD-compliant software and submit tax information digitally.
- April 2027 – Those earning between £30,000 and £50,000 will also need to comply.
- Date to be confirmed – If you earn over £20,000, you may also need to join later, though there’s no set timeline yet.
For now, if you earn under £30,000, you don’t need to switch. However, it’s worth keeping an eye on updates from HMRC.
What Does MTD for IT Mean for You?
Instead of filing one Self Assessment tax return per year, affected businesses and landlords will need to:
- Keep digital records of income and expenses.
- Use MTD-compatible software to manage and submit tax information.
- Submit tax updates to HMRC every quarter, rather than once a year.
- Send a Final Declaration at the end of the tax year to confirm everything is correct.
At first glance, this might seem like extra work, but in reality, it helps spread the admin across the year and keeps everything up to date, so there’s less last-minute stress.
How to Prepare for MTD for IT
Move to digital recordkeeping – If you’re still using spreadsheets or paper records, now’s the time to switch to MTD-compliant software like Xero, QuickBooks, or Sage.
Plan for quarterly updates – Instead of one tax return, you’ll need to submit four updates a year plus a final declaration. It’s a shift in routine, but one that can make things more manageable.
Check your software – Not all accounting software is MTD-compliant. If you’re not sure, we can help you find the right solution.
Ask for support if you need it – If you’re feeling unsure about how MTD for IT will affect you, now’s the time to get advice. The earlier you prepare, the smoother the transition will be.
Why MTD for IT Could Be a Good Thing
It’s easy to see tax changes as an extra burden, but MTD for IT does have some benefits:
- Fewer errors – Digital records help reduce mistakes in tax returns.
- Better financial visibility – Keeping everything updated throughout the year gives you a clearer picture of your income and expenses.
- Less last-minute stress – No more rushing to pull everything together in January.
Need Help Getting Ready?
We know that tax changes can feel like yet another thing to add to your to-do list. But with the
right preparation, MTD for IT doesn’t have to be stressful. In fact, it could actually help you stay more in control of your finances throughout the year.
At Venton, we’re here to make sure you’re not left scrambling at the last minute. Whether you need help choosing the right accounting software, setting up digital records, or just understanding what this all means for your business, we can guide you through it.
The earlier you start preparing, the easier the transition will be. So if you have questions or want to get a plan in place, get in touch with us today. We’ll make sure you’re ready – without the headaches.