Making Tax Digital for Income Tax
Making Tax Digital help for Sole Traders and Landlords
Making Tax Digital for Income Tax is now mandatory for the first group of affected Sole Traders and landlords, changing the way qualifying businesses and property owners keep records and report information to HMRC.
Mysimplytax provides complete Making Tax Digital support, including Sage accounting software, digital bookkeeping and the submission of your quarterly HMRC updates, together with your ongoing Self Assessment requirements.
If you're unsure whether MTD applies to you, need help setting up digital records or simply want an accountant to manage the process for you, our team can help you understand what needs to be done and keep your accounting records organised throughout the year.
With offices in Bromley and London and a fully digital accounting service, we provide MTD accounting support to clients throughout the UK.
Who needs to use Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax is being introduced in stages for individuals with income from self-employment and property.
When you need to start depends on your qualifying income. This is broadly your total gross income from self-employment and property before expenses, rather than your taxable profit.
If you have both self-employment and property income, these sources are combined when determining your qualifying income.
1
Over £50,000
MTD from 6 April 2026
If your qualifying income for 2024/25 was more than £50,000, you need to use Making Tax Digital for Income Tax from 6 April 2026.
2
Over £30,000
MTD from 6 April 2027
If your qualifying income for 2025/26 is more than £30,000, you will need to use Making Tax Digital for Income Tax from 6 April 2027.
3
Over £20,000
MTD from 6 April 2028
If your qualifying income for 2026/27 is more than £20,000, you will need to use Making Tax Digital for Income Tax from 6 April 2028.
Is the MTD threshold based on turnover or profit?
The Making Tax Digital qualifying income threshold is based on gross income before expenses — not your taxable profit.
For example, if you receive £35,000 of gross income from self-employment and £20,000 of gross rental income, your combined qualifying income would be £55,000 even though your eventual taxable profit may be considerably lower after allowable expenses.
Income from employment, dividends and pensions does not normally form part of your MTD qualifying income calculation.
Who does MTD for Income Tax apply to?
Making Tax Digital for Income Tax currently applies to qualifying individuals who are registered for Self Assessment and receive income from self-employment as a Sole Trader, property as a landlord, or both.
Limited Companies are not brought into Making Tax Digital for Income Tax by these rules, and partnerships are not currently required to use MTD for Income Tax.
Not sure when you need to start?
Speak to Mysimplytax and we can help you check your qualifying income, understand when Making Tax Digital applies to you and explain what you need to do next.
How does Making Tax Digital for Income Tax work?
Making Tax Digital changes how you keep your accounting records and provide information to HMRC during the tax year.
Instead of gathering your records together once a year, you'll need to maintain digital records using MTD-compatible software and send summary information about your self-employment or property income and expenses to HMRC every quarter.
Your annual tax return still remains part of the process, bringing together your business information with any other relevant income and tax information for the year.
1
Keep digital records
Your business or property income and expenses need to be recorded digitally using MTD-compatible accounting or bookkeeping software.
2
Keep your bookkeeping up to date
Record your income and expenses throughout the year so your digital accounting records remain organised and ready for your quarterly updates.
3
Send quarterly HMRC updates
Every three months, summary totals from your digital records are sent to HMRC through your MTD-compatible software.
4
Complete your tax return
After the tax year ends, your information is finalised and your tax return is submitted using compatible software, including other relevant income and tax information where required.
Are MTD quarterly updates the same as quarterly tax returns?
No. Making Tax Digital quarterly updates are not four separate tax returns.
The quarterly updates provide HMRC with summary information about your self-employment or property income and expenses from your digital records. Your tax position is then finalised through your annual tax return.
Although MTD quarterly updates are sometimes informally described as “quarterly tax returns”, it is more accurate to describe them as quarterly HMRC updates.
Do I have to pay tax every quarter under MTD?
No. Making Tax Digital introduces quarterly reporting, but it does not mean you have to pay your Income Tax four times a year.
Your normal Income Tax payment deadlines continue to apply. The quarterly updates are designed to keep HMRC informed about your income and expenses during the year rather than creating four separate tax bills.
When are MTD quarterly updates due?
These are the standard quarterly update deadlines. Your accounting software can also allow calendar-quarter periods, but the submission deadlines remain the same.
7 August
7 November
7 February
7 May
What's included in our Making Tax Digital service?
Our Making Tax Digital service is designed to take care of the ongoing digital record keeping and HMRC reporting requirements for you, combining accounting software, bookkeeping, quarterly updates and your annual tax return in one straightforward service.
Sage Accounting Software
Digital Bookkeeping
Quarterly HMRC Updates
Access to Sage cloud accounting software to help maintain your digital records, manage income and expenses and connect your accounting information with our team.
Ongoing bookkeeping support to help keep your income, expenses and digital accounting records organised throughout the year.
Preparation and submission of your required quarterly updates to HMRC using the information maintained within your digital accounting records.
Annual Tax Return
Preparation and submission of your annual tax return using MTD-compatible software, bringing together your MTD information with other relevant income and tax information.
MTD Setup & Registration
Bank Feed Setup
Ongoing Accountant Support
Year-Round Tax Visibility
Help getting ready for Making Tax Digital, including checking your requirements, setting up your accounting software and assisting with the MTD sign-up process where required.
Connect your business bank account to Sage where appropriate to help bring transactions into your accounting records and simplify ongoing bookkeeping.
Access to our team throughout the year if you have questions about your bookkeeping, Making Tax Digital or Self Assessment obligations.
Keeping your records up to date throughout the year gives you better visibility over your income and expenses and can help you understand how your tax position is developing.
Making Tax Digital Support
From £54/month
Straightforward monthly pricing for ongoing Making Tax Digital support, including Sage accounting software, digital bookkeeping, quarterly HMRC updates and your annual Self Assessment tax return.
We'll confirm the appropriate service and fee based on your income sources and accounting requirements before you join.
Making Tax Digital for Sole Traders
If you're self-employed as a Sole Trader, Making Tax Digital for Income Tax may change how you keep your business records and report your income and expenses to HMRC.
Once you are required to use MTD, you'll need to maintain digital records of your self-employment income and expenses using compatible software, send quarterly updates to HMRC and submit your annual tax return using compatible software.
Mysimplytax can manage the process with you, providing Sage accounting software, ongoing digital bookkeeping, quarterly HMRC updates and your annual Self Assessment tax return as part of one ongoing service.
This means you can continue running your business while we help keep your accounting records organised and your Making Tax Digital requirements on track throughout the year.
MTD support for self-employed businesses
✓ Sage cloud accounting software
✓ Digital bookkeeping
✓ Recording business income and expenses
✓ Quarterly HMRC updates
✓ Self Assessment tax return
✓ Ongoing MTD support
Making Tax Digital for Landlords
Making Tax Digital for Income Tax also applies to qualifying individuals who receive income from property.
If your qualifying income brings you within MTD, you'll need to maintain digital records of your property income and expenses and submit quarterly updates to HMRC using compatible software.
Mysimplytax can help landlords manage their digital property records, bookkeeping, quarterly HMRC updates and annual tax return, giving you ongoing support rather than leaving your property accounts until the end of the tax year.
If you receive both rental income and self-employment income, the relevant gross income sources are combined when determining your qualifying income for Making Tax Digital.
What if I jointly own a rental property?
If you jointly own a rental property, it is generally your share of the property income that counts towards your qualifying income for Making Tax Digital.
For example, if a jointly owned property generates £50,000 of income and you are entitled to an equal 50% share, £25,000 would normally count towards your qualifying income from that property.
There are also specific digital record-keeping rules and simplifications available for jointly let properties, so the exact reporting requirements can depend on your circumstances.
What if I have more than one property?
If you already have a UK property business and begin renting out another UK property, HMRC does not generally treat each additional property as a completely separate MTD income source.
Your property income forms part of your overall property business records, while your qualifying income is considered alongside any relevant self-employment income when determining whether MTD applies to you.
Making Tax Digital software and digital records
Making Tax Digital for Income Tax requires you to use compatible software to create and maintain digital records of your self-employment or property income and expenses.
Your software also needs to work with the MTD process so that the required quarterly updates can be sent to HMRC and your tax return can be submitted using compatible software.
At Mysimplytax, we use Sage as our preferred cloud accounting solution, combining the software with ongoing bookkeeping and accountant support so that you don't have to manage the technology and reporting requirements on your own.
What are digital tax records?
Digital records are records of your business or property income and expenses that are created and stored using software that works with Making Tax Digital for Income Tax.
Depending on how your business operates, these records can be created from invoices, expenses, bank transactions and other accounting information maintained within your software.
You still need to retain the underlying records and supporting documents required for Self Assessment, such as relevant invoices and bank statements.
Using Sage for Making Tax Digital
Mysimplytax uses Sage accounting software to help clients maintain their digital accounting records and manage the information needed for Making Tax Digital.
Where appropriate, Sage can be connected to your business bank account to bring transactions into your accounting records, while invoicing and expense information can also be maintained digitally.
Our bookkeeping team can then help keep those records organised throughout the year, ready for your quarterly HMRC updates and annual tax return.
1
Cloud accounting
Access your accounting information digitally and keep your business or property records organised in one place.
2
Bank feeds
Connect eligible bank accounts to help bring transactions into your accounting software and simplify ongoing bookkeeping.
3
Digital bookkeeping
Our bookkeeping support helps keep your income and expense records organised throughout the year.
4
HMRC reporting
Your maintained digital records provide the information needed for your quarterly MTD updates and annual tax return.
Do I have to use Sage for Making Tax Digital?
No. HMRC does not require you to use Sage specifically.
You must use software that is compatible with Making Tax Digital for Income Tax. Mysimplytax uses Sage as our preferred accounting platform because it allows us to combine digital record keeping, bookkeeping and ongoing accounting support within our service.
If you're already using another accounting system, speak to us before changing anything and we can discuss the most appropriate way to manage your records going forward.
Need help setting up your MTD software?
Whether you're starting from spreadsheets, paper records or another accounting system, we can help you understand what needs to change and get your digital accounting setup ready for Making Tax Digital.
Making Tax Digital Accountants in Bromley & London
With offices in Bromley and London, Mysimplytax provides Making Tax Digital support to Sole Traders and landlords locally and throughout the UK.
Our MTD service combines Sage accounting software, digital bookkeeping, quarterly HMRC updates and your annual tax return, giving you ongoing support throughout the year rather than leaving your accounting until the Self Assessment deadline.
Making Tax Digital FAQs
Need help with Making Tax Digital?
Whether you need help understanding if Making Tax Digital applies to you, setting up digital records or want an accountant to manage your ongoing MTD requirements, Mysimplytax can help.
Our Making Tax Digital service combines Sage accounting software, digital bookkeeping, quarterly HMRC updates and your annual Self Assessment tax return, with ongoing support throughout the year.
Based in Bromley and London, supporting Sole Traders and landlords throughout the UK.