Making Tax Digital (MTD): What We Know So Far, And Why You Should Care!

3 days ago

2 min read

So... we all hate filing one tax return a year, right? 😩

Now imagine having to file FIVE.

Well, don’t just imagine it, because it’s happening.

From April 2026, Making Tax Digital (MTD) becomes mandatory for many sole traders and landlords, and it’s about to completely change how you manage your tax returns.

🔍 What is Making Tax Digital (MTD)?

MTD is HMRC’s move to fully digitise the UK tax system. It’s part of their long-term plan to make tax administration more efficient, reduce errors, and increase transparency.

Sounds good in theory... but for taxpayers, it means a lot more admin and much sooner than you think.

🚨 Who’s Affected and When?

April 2026: If you’re self-employed or a landlord and your annual income is over £50,000, you’ll be required to start filing under MTD rules.
April 2027: If you earn between £30,000 and £50,000, your turn comes next.
2028 (expected): Those earning between £20,000 and £30,000 will be brought in, although HMRC hasn’t confirmed the exact timeline for this group yet.

So yes, eventually, everyone will be part of the MTD system.

🧾 What Does Filing Under MTD Actually Mean?

Instead of the familiar single tax return each January, you’ll now be required to:

File four quarterly updates throughout the year
Submit a final end-of-year declaration (similar to your current annual return)

Here’s what the new quarterly deadlines will look like:

7 August (for 6 April – 5 July)
7 November (for 6 July – 5 October)
7 February (for 6 October – 5 January)
7 May (for 6 January – 5 April)

Your final declaration still lands on 31 January, the same as now.

And no, you won’t have to make additional payments with each update (at least not yet). The updates are purely informational for now.

What Else Do You Need to Know?

You must keep digital records of your income and expenses paper and spreadsheets alone won’t cut it.
You’ll need to use approved MTD-compatible software to file returns (think: Xero, QuickBooks, Digita, and others).
HMRC is still working out the finer details and so are the software providers. There will likely be bumps in the rollout.

What About Penalties?

While HMRC hasn’t confirmed a full penalty regime just yet, it’s safe to assume late submissions will eventually result in fines, similar to the current system.

That said, we’re hoping there’ll be a grace period during the early stages. 🤞