Making Tax Digital: Simplifying compliance, empowering your business.
Understanding the shift to digital tax
Making Tax Digital (MTD) is HMRC’s initiative to modernise the UK tax system. It means keeping digital records and submitting tax returns using compatible software. The aim is to achieve greater accuracy, fewer errors, allowing you more time for what you do best -running your business.
From 6 April 2026, MTD will apply to individuals with combined income over £50,000 from self-employment and property.
This change isn’t just about compliance. It’s a smarter way to manage your finances, giving you clearer insights, better organisation, and confidence that you’re always up to date.
Key dates for Making Tax Digital
April 2026
Mandatory for income over £50,000
April 2027
Threshold drops to £30,000
April 2028
Threshold drops to £20,000
Contact us
Client Scenarios
We understand the need for a tailored approach when it comes to supporting businesses and individuals with Making Tax Digital. That is why we have created client scenarios demonstrating the different level of support available.
How we can support you:
Navigating the digital transition to Making Tax Digital (MTD) doesn’t have to be overwhelming. We are here to make sure you’re fully prepared, whether you’re a sole trader, landlord, or small business owner.
Software selection & integration
As part of guiding you through each step of your transition to Making Tax Digital, we start with helping you select the right MTD compatible software for your business.
We work with you in selecting the right MTD-compatible software, taking into account your income sources, existing systems, and future needs. We recommend a number of trusted cloud-based solutions, such as Xero that simplify digital record keeping and HMRC submissions.
Once the right software is chosen, our team handles the full setup and integration, ensuring your new tools work seamlessly with your current bookkeeping or accounting systems. From start to finish, we make sure you’re ready to submit digitally with confidence.
Is Making Tax Digital relevant to you?
If your business is VAT-registered, you’re likely already using digital tools in order to meet HMRC’s requirements, however, digital tax is evolving.
By April 2026, the requirement to use approved digital software will apply to Income Tax Self Assessment. Whether you’re a sole trader, landlord, or running a limited company, now’s the time to prepare and future-proof your processes.
Download our Making Tax Digital roadmap
We’ve created a step-by-step Making Tax Digital roadmap to guide you through everything from checking your eligibility, to choosing compatible software and getting into the rhythm of quarterly updates.
The benefits of the digital switch
Making Tax Digital isn’t just about ticking compliance boxes. It is about achieving efficiency and accuracy. Digital accountancy tools offer:
- Real-time financial insights
- Reduced risk of penalties
- Streamlined workflows
- Peace of mind
Frequently asked questions
Making Tax Digital is a government-led initiative transforming the UK tax system. By requiring digital record-keeping and submission through approved software, MTD helps businesses and individuals reduce errors, save time, and stay compliant. It’s all about making tax reporting faster, easier, and more accurate.
Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) will come into force in the UK on 6 April 2026. This initial phase will apply to sole traders and landlords with a gross annual income over £50,000.
Further phases are planned as per the below thresholds:
- April 2027: For those with income between £30,000 and £50,000.
- April 2028: For those with income over £20,000.
Sole traders and landlords who are registered for Self Assessment, or have qualifying income (gross income from self-employment and/or property) over:
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- £50,000 – must comply from 6 April 2026
- £30,000 – must comply from 6 April 2027
- £20,000 – expected to comply from 6 April 2028 (pending legislation)
Yes. To comply with MTD, you’ll need to use MTD-compatible software to keep digital records and submit updates to HMRC.
We’ve partnered with Xero, a trusted provider of cloud-based accounting software, to make this process easier. Xero offers tailored solutions for sole traders and landlords, helping you stay organised and compliant with MTD requirements.
The threshold includes self-employment income and property income. Other types of income (like pensions or dividends) are not counted towards this limit for MTD purposes.
Yes, each property owner is responsible for submitting their own quarterly report for their share of income and costs. However, there’s a helpful easement available: you can choose to report only your share of income each quarter and defer reporting expenses until the final submission of the year. This option can simplify things for many joint property owners.
UHY and Affinia have provided our business with consistent and highly valued support across tax returns, VAT, and wider business advisory services. Their team combines strong technical expertise with a notably personal approach, which has made a real difference to us as a business.
What sets them apart is the quality of the relationship they build with their clients. Rather than feeling like one of many anonymous accounts, we have always felt supported by approachable individuals who understand our business and take the time to provide clear, practical advice. That personal service has given us confidence that our financial matters are being handled with care and attention.
Their support has not only helped to ensure accuracy and compliance, but has also identified errors and delivered cost savings for the business. For a company such as ours, operating in the specialist field of major works to listed, heritage, and conservation buildings in Brighton and Hove, having trusted advisers who understand the importance of detail and reliability is invaluable.
We would be pleased to recommend UHY Affinia to any organisation seeking a professional, dependable, and client-focused accountancy firm.
Raymond Sussex
Business Administration Manager, Sussex BPM Limited
