Making Tax Digital for Income Tax Explained Simply

If you’re self-employed, run a small business or earn rental income, you’ve probably heard about Making Tax Digital or MTD for short 🤔

From 6 April 2026, the way you report income to HMRC is changing. It’s part of a bigger move towards a modern, digital tax system.

And while it might sound daunting at first, it’s actually designed to make life easier with better visibility, fewer surprises, and less last-minute stress which is actually a really good thing. 

At BarrettStacey Accounting, we’re already helping ambitious business mums and small business owners get ready calmly and confidently.

💻 What Is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) means you’ll no longer file one big Self Assessment once a year. Instead, you’ll:

☺️ Keep digital records in approved software

🙌🏻 Send four quarterly updates to HMRC

🤩 Submit a final declaration by 31 January each year

These updates will show your income and expenses for each quarter, giving HMRC (and you) a clearer, more accurate view of your business profits throughout the year.

It’s a simple change that replaces a lot of the annual January chaos with smaller, easier check-ins.

We are really enjoying helping new clients get organised and ready for this. We are seeing Self Assessments and Bookkeeping being done in so many different ways, and it’s great to get everyone aligned. If you think you may have got yourself in a bit of hole with it…don’t worry, we can help. Just simply book a call with one of our friendly team members.

👩‍👧 Who Needs to Join and When

From 6 April 2026, MTD for ITSA applies to:

• Sole traders with business income over £50,000

• Landlords with rental income over £50,000

• Or anyone who has a combined income from both that exceeds £50,000

Those earning between £30,000 and £50,000 will join from April 2027, while those under £30,000 aren’t required yet (but can opt in voluntarily). Sometimes it’s better to get ahead, if you’re interested in getting better visibility on your numbers feel free to book a call.

These thresholds and dates come directly from HMRC’s official rollout plan (gov.uk).

🧾 What Will Change Day-to-Day

Once you’re set up for MTD, you’ll need to:

😊 Keep digital business records (no paper or manual spreadsheets)
🙌🏻 Use HMRC-recognised software like QuickBooks, Xero or FreeAgent
🤩 Submit quarterly updates online via your software
💜 Send your final declaration by 31 January following the tax year

HMRC-approved software will calculate totals and link directly to your tax account, so your submissions are secure, accurate and on time.

📅 Quarterly Update Dates (Verified with HMRC)

If you follow the standard tax-year basis (6 April – 5 April):

Then, you’ll file your Final Declaration (your digital tax return) by 31 January after the tax year ends.

These dates are confirmed by HMRC’s live guidance on quarterly updates at the time of writing this blog (gov.uk).

💬 Example: A Year Under MTD

Let’s say you’re a VA Coach earning £55,000 a year.
Here’s what your first MTD year (2026/27) might look like:

📅 April – July → update by 7 August 2026
📅 July – October → update by 7 November 2026
📅 October – January → update by 7 February 2027
📅 January – April → update by 7 May 2027
📅 Final Declaration → due 31 January 2028

Instead of facing a mountain of paperwork at the end of the year, you’ll make small, manageable updates every few months and know exactly where you stand.

🌿 Why It’s Worth Preparing Early

MTD isn’t about more admin… it’s about smarter habits.

Getting ready early means:

☺️ You’ll choose the right software calmly

🙌🏻 We can help you test your systems

🤩 You’ll avoid any April 2026 panic

😊 You can spread costs over more months (if you join now!)

And by joining BarrettStacey in December, your alignment fee can be split over 5 months instead of the usual 3 giving you space to breathe while you get organised.

You can email us, simply copy and paste the below subject to ask@barrettstacey.co.uk

🚫 No More 24/25 Onboarding

We’re no longer taking on new 24/25 Self Assessment clients.
Our full focus is now on helping clients prepare for MTD for ITSA and the 25/26 tax year.

This ensures every new client gets our full attention and plenty of time to set up before April 2026.

How BarrettStacey Makes It Easy

Here’s how we help ambitous business mums get MTD-ready:

☺️ Full digital setup 

🙌🏻 Friendly guidance so you feel confident in your unique whatsapp group

💜 Optional 5-month alignment fee (December only)

No jargon. No panic. Just calm, professional setup done for you.

💡 Common Questions (and Calm Answers)

“Do I still file a tax return?”
Yes, but under MTD for ITSA it’s called a Final Declaration and it’s sent digitally.

“Will I get penalties if I’m late?”
HMRC uses a points-based system for late submissions… but we’ll help you stay well ahead.

“What if I don’t use software?”
You’ll need to switch to HMRC-approved software before MTD for ITSA begins. We’ll guide you every step of the way.

“Can you do my updates for me?”

Yes. BarrettStacey will manage your quarterly updates, keep your books digital, and handle your final declaration.

📞 Ready to Get Started?

We’re now onboarding Self Assessment 25/26 clients only, helping them prepare for Making Tax Digital for Income Tax calmly and confidently.

Join us in December 2025 to take advantage of our 5-month alignment fee offer and walk into 2026 feeling completely prepared 🌿

📞 Book your free discovery call
📧 ask@barrettstacey.co.uk | Subject: SA25/26 December 5 month offer

🧠 About the Author

Authored by Hayleigh Barrett, Director of BarrettStacey Accounting… a female-led accountancy practice helping ambitious business mums and small business owners across the UK feel confident with their numbers. Known for friendly support and bookkeeping that actually makes sense 😊