Making Tax Digital for Income Tax

What is Making Tax Digital (MTD)?

Making Tax Digital is part of HMRC’s plan to modernise the UK tax system.

From April 2026, self-employed individuals and landlords with income over £50,000 will need to keep digital records and submit quarterly updates to HMRC using approved software.

Those earning over £30,000 will follow from April 2027.

The goal is to make tax easier, reduce errors, and give you a clear, up-to-date view of your business finances all year round.

Who it affects

Use these thresholds to check when MTD will apply to you:

From April 2026

Your total income from self-employment or property exceeds £50,000

From April 2027

Your total income from self-employment or property is between £30,000–£50,000

Below £30,000

Keep an eye on HMRC for updates — MTD may be extended in the future

What’s changing

You’ll move from submitting a single annual tax return to sending quarterly updates through software such as Xero.
Each tax year you’ll need to:

Send four quarterly updates of income and expenses
Submit an End of Period Statement (EOPS) to confirm your totals
File a Final Declaration to finalise your overall tax position

Everything must be done digitally — paper records and spreadsheets will no longer meet HMRC requirements.

Why it matters

MTD isn’t just about compliance — it’s about giving you better control over your finances.
By going digital, you’ll:

See how your business is performing in real time
Avoid end-of-year surprises
Keep accurate records automatically
Spend less time worrying about paperwork

And with the right support, the switch can be simple and stress-free.

How Trowel Bookkeeping can help

We’ll make sure you’re fully prepared for MTD for Income Tax — whichever way you prefer to work.
We offer two straightforward options:

Option 1: We do it all for you

Ideal if you’d like to hand everything over and know it’s done properly.
We’ll:

• Set you up with Xero and receipt capture software
• Manage your monthly bookkeeping
• Prepare and submit your quarterly MTD updates
• Complete your final year-end declaration (Self Assessment)
• Keep you compliant, organised, and informed all year round

You’ll have complete peace of mind, and up-to-date financial visibility without the stress.

Option 2: Do it yourself, with our support

If you’d prefer to handle your own bookkeeping, we’ll help you get started the right way.
We’ll:

• Set you up on Xero Simple Start (MTD-compatible software)
• Provide a one-to-one training session to show you how it all works
• Give you takeaway training videos for future reference
• Include one free quarterly Xennon Connect review — where we check your records, review your figures, and answer your questions

You’ll have full control of your books, with professional backup if needed.

Download your free MTD Readiness Checklist

Want to make sure you’re fully prepared for MTD for Income Tax?
Download our free printable checklist to track each step — from checking if MTD applies to you, to getting your software ready and planning your first quarterly submission.

It’s simple, practical, and designed to help you feel confident and organised before the deadline.

Download Here