MTD for Income Tax: what practices must do now

Making Tax Digital for Income Tax is the biggest change to Self Assessment in a generation. It is already live for the first group of sole traders and landlords, and the number of clients in scope grows each year. Here is what practices need to have in place.

Who is in scope, and when

• From 6 April 2026: sole traders and landlords with qualifying income over £50,000.
• From 6 April 2027: qualifying income over £30,000.
• From 6 April 2028: qualifying income over £20,000.

Qualifying income is the total gross income from self-employment and property - turnover and rents before expenses, not profit. HMRC looks at the Self Assessment return from two tax years earlier, so the 2025-26 return decides who joins in April 2027. Check HMRC's current guidance for exemptions and special cases.

What changes for the client

Clients in MTD must keep digital records and send a quarterly update to HMRC through compatible software. For the standard quarters, updates are due by 7 August, 7 November, 7 February and 7 May. The year still ends with a final declaration by 31 January, which replaces the traditional return.

What practices need to do

1. Segment your client list. Use the latest returns to group clients by qualifying income and by start date, so you know who joins in each year.
2. Choose the software. Decide which MTD-compatible products you will support and move clients still on spreadsheets or paper records early.
3. Sort out authorisations. Make sure you are authorised to act for each client for MTD for Income Tax through your agent services account.
4. Reprice the work. Four updates a year plus a final declaration is more work than one annual return. Agree new fees and engagement letters before the first quarter.
5. Plan the capacity. Quarterly deadlines turn a January peak into four smaller peaks plus the final declaration. Map out who will do the bookkeeping and updates each quarter.

Where outsourcing helps

The new work is mostly regular, process-driven bookkeeping and quarterly updates - exactly the kind of work that can be prepared by a trained outsourced team for your review. That keeps your own staff on advice and the final declaration. Our bookkeeping and personal taxteams can keep clients' digital records up to date and prepare quarterly updates and returns, alongside MTD VAT returns. Talk to us about your MTD client list.

Thresholds and dates are as published by HMRC at the time of writing. Always check the latest GOV.UK guidance.