Making Tax Digital Starts April 2026: Does It Affect You?

Rebecca Marshall
1 day ago
5 min read

For many sole traders and landlords, April 2026 will bring the biggest change to the UK tax system in over 30 years.

The new system, called Making Tax Digital for Income Tax (MTD for Income Tax), changes how income and expenses are recorded and reported to HMRC.

Instead of completing a single Self Assessment tax return each year using manual records, businesses will be required to maintain digital records and submit updates throughout the year using compatible software.

While this may sound like a big change, the aim is to make tax reporting more accurate, easier to manage, and less stressful at the end of the year.

Here’s what you need to know.

Making Tax Digital Starts April 2026: Does It Affect You?

What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) is HMRC’s long-term plan to move the UK tax system fully online.

Under the new system, people who earn income through self-employment or property will record their income and expenses digitally and send quarterly updates to HMRC through recognised software.

Instead of completing your tax return all in one go at the end of the year, the process is spread across the year.

This means:

Keeping digital records of income and expenses
Sending four quarterly updates to HMRC
Submitting an end-of-year tax return summary

The tax payment deadline remains the same: January 31st.

Who Will Need to Use MTD?

From 6 April 2026, Making Tax Digital for Income Tax will apply to:

Sole traders
Landlords
Anyone earning income from self-employment or property

If your total turnover from these sources is above £50,000, you will need to start using MTD software from April 2026.

The rules are expected to expand further in future years to include businesses with lower income thresholds.

How the New System Works

Under MTD, the process is broken into smaller steps across the year.

1. Keep digital records

Income and expenses must be recorded using MTD-compatible accounting software or apps.

This can be done from a phone, tablet, or computer, and many systems allow you to upload receipts or invoices as you go.

2. Send quarterly updates

Every three months, the software will send a summary of your income and expenses directly to HMRC.

These updates are not tax returns; they are simply snapshots of how your business is performing.

If your records are kept up to date, submitting these updates should take just a few clicks.

After each update, you will also be able to see an estimate of your tax position, helping you plan ahead.

3. Submit an end-of-year tax return

At the end of the tax year, the software will compile your quarterly updates into an end-of-year summary.

You’ll review the figures, add any additional income (such as bank interest or pensions), claim any reliefs, and then submit your tax return, just like now.

Key Dates to Know

If your turnover is above £50,000, these are the most important dates to be aware of.

6 April 2026
MTD for Income Tax officially begins
7 August 2026
Deadline for the first quarterly update
7 November 2026
Deadline for the second quarterly update
7 February 2027
Deadline for the third quarterly update
7 May 2027
Deadline for the fourth quarterly update
31 January 2028
Deadline to submit your first full tax return using MTD software

Will You Pay Tax Four Times a Year?

No.

Although updates are sent quarterly, tax payments are still due by 31 January, just as they are now.

The main difference is that your records will be submitted throughout the year instead of all at once.

What Should You Do Now?

If you think MTD will apply to you from April 2026, the best thing you can do is start preparing early.

A few simple steps now can make the transition much easier.

Feeling unsure about what this means for you?

Making Tax Digital is a significant change, and many business owners are still working out how it will affect them. If you’d like some guidance, the team at Strive can help you understand the new requirements, choose the right software, and make sure everything is set up correctly before the deadline.

Check your turnover

If your income from self-employment or property is above £50,000, you’ll need to comply from April 2026.

Choose compatible software

HMRC requires businesses to use recognised digital software to record and submit their figures.

There are many options available, including accounting apps, cloud bookkeeping systems, and bridging software for spreadsheets. More on this below.

Start getting used to digital records

Even if MTD doesn’t apply to you yet, moving to digital record-keeping now can save time and reduce errors.

Choosing Software for Making Tax Digital

To comply with Making Tax Digital for Income Tax, you’ll need to use compatible software that connects directly to HMRC.

This software allows you to:

Create and store digital records of your income and expenses
Send quarterly updates to HMRC
Submit your annual tax return

HMRC does not provide its own software, so businesses will need to choose from a list of recognised providers.

There are both free and paid options available, and the right choice will depend on how you currently manage your records.

Accounting or bookkeeping apps

Many businesses will choose a bookkeeping or accounting app that handles everything in one place.

These tools often allow you to:

Link your bank account so transactions import automatically
Scan receipts using your phone camera
Track income and expenses throughout the year
Send quarterly updates to HMRC with a few clicks

Many also include reminders for important deadlines, helping you stay organised.

Using spreadsheets?

If you currently keep your records in spreadsheets, you may still be able to continue doing so.

However, you will need bridging software to connect those spreadsheets to HMRC so that your quarterly updates and tax returns can be submitted digitally.

While this option works, many businesses find that switching to dedicated bookkeeping software saves time and reduces errors.

If you feel it's time to start moving away from spreadsheets, we offer a Financial Systems Review service. Find out more here.

Choosing the right software

Different software products offer different features, so it’s important to choose one that works for your situation.

For example, you may want software that:

Supports both self-employment and property income
Works with your accounting period
Allows your accountant to access your records
Fits within your budget

HMRC provides a tool to help you find recognised software providers that are compatible with Making Tax Digital.

You can explore the options here:

https://www.gov.uk/guidance/find-software-that-works-with-making-tax-digital-for-income-tax

All providers listed have gone through HMRC’s recognition process, although HMRC does not recommend any specific product.

If you're unsure which software is right for you, it’s worth getting advice before the April 2026 deadline.

Setting up the right system early can make managing your records much easier once Making Tax Digital comes into effect.

Final Thoughts

Making Tax Digital for Income Tax represents a significant shift in how self-employed people report their income.

While the system may feel unfamiliar at first, the goal is to make tax reporting more accurate, easier to manage, and less rushed at year-end.

If you’re unsure how Making Tax Digital will affect you, or need help choosing the right bookkeeping software, the team at Strive can help you prepare before the April 2026 deadline.