Sound stressful? Don’t worry… we’ve got you. Let’s break it all down in plain English: What MTD means, when it affects you, and how to get ready without panicking.
🔍 What is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) is HMRC’s plan to modernise the UK tax system. It’s all about:
Keeping digital records
Submitting quarterly updates via approved software
Sending a final declaration at year-end (by 31 January)
👉 You can read the full HMRC guidance here.
This isn’t just bureaucracy for the sake of it. MTD is designed to reduce errors, make taxes more accurate, and help you understand your finances in real time. But yes, it does mean changing how you work.
🗓️ When Does MTD for Income Tax Start?
| Turnover | Start Date |
|---|---|
| £50,000 or more | April 2026 |
| £30,000 – £49,999 | April 2027 |
| Under £30,000 | Under review by HMRC |
Important: Turnover is based on the tax year (6 April to 5 April) not a rolling 12 months like VAT.
If you’re close to the £50k line, now’s a great time to start preparing.
👀 Who Needs to Comply?
Right now, MTD for Income Tax applies to:
Sole traders
Landlords (UK and overseas property income)
Anyone with a qualifying income over £50,000 (combined from self-employment and/or property)
It doesn’t currently apply to:
Directors who only earn a salary/dividends from their company
Partnerships
Limited companies
👉Check your eligibility here on GOV.UK
💻 What Will You Actually Have to Do?
Here’s what compliance looks like:
✅ Keep digital records
✅ Submit quarterly summaries via approved software
✅ Send a final declaration by 31 January
📆 Quarterly Submission Deadlines
You’ll submit every 3 months, with a 1-month window after each quarter ends:
| Quarter | Tax Year Period | Calendar Option | Deadline |
|---|---|---|---|
| Q1 | 6 Apr – 5 Jul | 1 Apr – 30 Jun | 7 August |
| Q2 | 6 Jul – 5 Oct | 1 Jul – 30 Sep | 7 November |
| Q3 | 6 Oct – 5 Jan | 1 Oct – 31 Dec | 7 February |
| Q4 | 6 Jan – 5 Apr | 1 Jan – 31 Mar | 7 May |
| Final Decl. | — | — | 31 January |
More here: HMRC’s official deadlines
✨ Benefits of Making Tax Digital
Sure, change can feel awkward. But once you get into the rhythm, MTD can actually help your business:
💡 Better tax visibility — no more January shocks
🧾 Fewer lost receipts — it’s all digital
🔍 Real-time insights — spot trends and make decisions faster
⏳ Simpler year-end — most of the work is already done
💬 Better communication with your Accountancy Team — we’ll be in the loop all year, not just in panic season
🔁 Common MTD Myths (Busted!)
❌ “I’ll need expensive software”
✅ Tools like FreeAgent are free with Mettle or NatWest accounts
❌ “HMRC will access my bank account”
✅ Nope. You submit summaries. HMRC doesn’t poke around in your accounts
❌ “I’ll pay tax every 3 months”
✅ Payment dates stay the same. It’s just the reporting that’s quarterly. But it would be really beneficial if you put your tax calculation into another pot.
🙋 Frequently Asked Questions
❓ Does this apply to directors’ personal tax returns?
Not unless you earn self-employment or property income over £50k. If your only income is salary/dividends from a limited company, MTD won’t apply (yet).
❓ When should I get ready for MTD?
Now is ideal. Even if your start date is 2026 or 2027, getting used to digital software and quarterly updates early makes it stress-free later.
❓ I earn less than £50k — what’s the future threshold?
| Your Turnover | Start Date |
|---|---|
| £50k+ | April 2026 |
| £30k–£49,999 | April 2027 |
| Under £30k | HMRC still deciding |
If your income fluctuates near those thresholds, it’s wise to prepare now. Once you’re in the MTD system, you usually stay in, even if your income drops.
❓ Is turnover based on the financial year?
Yes… 6 April to 5 April, just like your Self Assessment.
It’s not a rolling 12 months like VAT.
❓ I already have an accountant, how do I know they’re sorting this?
Ask them directly:
“Are you handling MTD for Income Tax for me? What’s the plan?”
They could be getting everything ready for you behind the scenes.
❓ I’m already a client, do I need to do anything?
If you’re one of our clients, you’re in safe hands.
We’ve already started prepping you for MTD, and you’ll have received this link via our newsletter.
Got questions? Just ask. That’s what we’re here for.
Know someone who’s a little unsure about MTD?
We’d love to help them too. You can refer your business friends to us and earn rewards through our affiliate programme.
👉 barrettstacey.co.uk/affiliates
✅ Your Next Steps
Check your turnover — are you over or approaching £50k?
Choose your software — We recommend FreeAgent, QuickBooks, Xero, or Sage
Practice quarterly bookkeeping or outsource the bookkeeping to us.
Book a friendly chat… no pressure, just clarity.
💬 Know someone feeling overwhelmed by MTD?
We’d love to help, and you can earn referral rewards too.
👉 Join our affiliate programme
✨ Still not sure what to pick?
We help clients choose and set up the right bookkeeping software based on their business model, goals and tech confidence. No waffle, no upsells, just honest advice and support that fits your workflow.
Book a free call and let’s get your systems working for you, not against you.
