Making Tax Digital is coming for landlords and the self employed – are you prepared?

Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is set to take effect from 6 April 2026, marking a significant shift in how many self-employed individuals and landlords manage and report their tax affairs.

Recap

Making Tax Digital (MTD) is a key part of the UK government’s long-term strategy to modernise the tax system and make it more efficient, accurate, and user-friendly. It aims to reduce the tax gap by minimising common errors, improving record-keeping, and bringing tax reporting into the digital age.

MTD for Income Tax Self-Assessment (MTD for ITSA) is the next major phase of this programme. It follows the earlier rollout of MTD for VAT, which has already made it mandatory for VAT-registered businesses to keep digital records and submit VAT returns using compatible software.

How does this differ from the current regime?

Under the current system, individuals are required to submit a single Self-Assessment tax return once a year, reporting all relevant income and expenses after the end of the tax year.

However, under MTD for ITSA, this process will change significantly. Taxpayers within scope will need to:

• Keep digital records using approved software,
• Submit quarterly updates to HMRC,
• File an End of Period Statement, and
• Submit a Final Declaration confirming all income.

Who’s affected?

From 6 April 2026, MTD for ITSA will apply to individuals who are self-employed and/or receive property income (from UK or overseas), where their combined gross income from these sources exceeds £50,000 per tax year.

The scope of MTD will widen in stages:

· From 6 April 2027, the threshold will reduce to £30,000.

· From 6 April 2028, the threshold will fall further to £20,000.

This phased rollout means that a growing number of individuals will be brought into the regime over the coming years. As such, it’s important to review your income levels annually to determine whether and when you’ll fall within the scope of MTD.

Are there any exemptions from MTD for Income Tax?

While most self-employed individuals and landlords will need to comply with MTD for ITSA, there are a few key exemptions worth noting.

• An individual is automatically exempt for a given tax year if they do not have a National Insurance number (NINO) on 31 January before that year begins.
• Similarly, those who file SA109 (residence and remittance basis pages) will not be required to join MTD until April 2027 at the earliest, even if their qualifying income exceeds the current £50,000 threshold.
• In addition, those completing a return as a trustee or personal representative are not within scope of the regime.

For a broader overview of other categories of exemption, click below to download our FAQ sheet.

Download FAQ

How can you prepare now?

1. Check if you meet the threshold: Review your total gross income from all self-employment and property sources. If it exceeds the relevant thresholds, you’ll be required to comply with MTD.
2. Start keeping digital records: If you're still using manual records or spreadsheets, begin moving towards fully digital bookkeeping.
3. Review and strengthen your record-keeping processes: Take this opportunity to assess how consistently and accurately you track your income and expenses. Identify any gaps or inefficiencies, and consider whether any training, process changes, or support are needed to bring your records up to MTD-ready standards.
4. If you do not already have a dedicated bank account for your business transactions, consider opening these now. Linking your business bank accounts to MTD-compatible software can be an easy step to creating digital records and streamlining the process.
5. Sign up for the MTD Pilot, to start making quarterly filings, perhaps from September or December 2025. This will allow you and your advisers to get used to the new process in a penalty-free environment, as well accelerating any efficiency savings available from fully digital processes.

How can we help?

Here, at Lubbock Fine, our experienced tax advisers are here to support you every step of the way as MTD for Income Tax approaches. Whether you need advice on compatible software, assistance in getting your records digital-ready, or full support with ongoing submissions, our team can guide you through the transition and beyond.

For more information about Making Tax Digital and getting ready for the 6 April 2026 roll out, get in touch with your usual LF contact or Tax Partner Phil Moss (philmoss@lubbockfine.co.uk).