At its core, Making Tax Digital for Income Tax changes how often you report your income and expenses to HMRC, and how you do it.

Under the current Self Assessment system, you report everything once a year. MTD for Income Tax replaces that with a more regular rhythm. Instead of one annual tax return, you'll send four quarterly updates to HMRC throughout the year, followed by a final end-of-period statement that wraps everything up.

Here's what that looks like in practice:

Quarterly updates are submitted four times a year, roughly every three months. Each one is a summary of your income and expenses for that period. They're not tax returns, and you won't owe any tax at the point of submitting them. Think of them more as regular check-ins that keep HMRC informed throughout the year.

The end-of-period statement comes at the end of the tax year. This is where you confirm your figures, make any adjustments, and finalise your tax position, much like the current Self Assessment process.

Compatible software is a requirement under MTD for Income Tax. You'll need to keep digital records and submit your updates through HMRC-approved software. The days of a spreadsheet and a once-a-year scramble are coming to an end.

The good news is that for most people, the quarterly updates themselves are straightforward, provided your bookkeeping is up to date throughout the year. That's exactly where we come in.

MTD for Income Tax applies to anyone who earns income from self-employment or property, above a certain threshold. It's being rolled out in stages, so when it applies to you depends on how much you earn.

The rollout timeline

• April 2026: sole traders and landlords with qualifying income over £50,000

• April 2027: those with qualifying income over £30,000

• April 2028: those with qualifying income over £20,000

Qualifying income means your gross income before expenses, not your profit. So if you're a landlord with rental income of £55,000 but significant costs, you'd still fall into the April 2026 group.

What if I have more than one source of income?

If you're both self-employed and a landlord, your income from both sources is combined when working out whether you meet the threshold. It's worth checking your position sooner rather than later if you're not sure where you stand.

Are there any exemptions?

Some people may be exempt, including those who are digitally excluded or whose circumstances make compliance genuinely impractical. HMRC will consider exemption requests on a case-by-case basis. If you think this might apply to you, it's worth taking advice early.

Not sure if this applies to you?

If your income is close to any of the thresholds, or you're unsure how your different income sources are counted, we're happy to help you work it out. A quick conversation now could save a lot of last-minute pressure later.

MTD for Income Tax brings a real opportunity to get your finances working better throughout the year, rather than playing catch-up every January. But it does require some preparation, and the earlier you start, the smoother the transition will be.

At Influential Accounting, we work with sole traders and landlords at every stage of MTD readiness, from those who haven't thought about it yet to those who just need a software recommendation and a nudge in the right direction.

Here's what we can help you with:

Checking your position: if you're not sure whether MTD for Income Tax applies to you, or when, we'll look at your income sources and give you a clear answer.

Getting your bookkeeping ready: quarterly updates only work if your records are kept up to date. We'll help you find a system that fits the way you work, whether that's Xero, QuickBooks, or another HMRC-compatible option.

Managing your quarterly updates: if you'd rather hand this over completely, we can take care of your submissions for you, so you're always compliant without it taking up your time.

Your end-of-year finalisation: we'll handle your end-of-period statement and make sure your tax position is accurate and optimised before anything is filed.

Ready to get started?

If MTD for Income Tax is on your radar and you'd like to understand what it means for you specifically, the best first step is a conversation. Get in touch and we'll take it from there.