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Your essential checklist for Making Tax Digital
From 6 April 2026, HMRC is introducing “Making Tax Digital” for Income Tax.
In this article, we’ve drilled down into what Making Tax Digital is, what will change, why it’s being introduced and who is affected.
Our experts at Attivo have also provided a handy Making Tax Digital checklist at the end, which affected individuals can use as a guide to navigating the new system.
What is “Making Tax Digital”?
Making Tax Digital (MTD) is HMRC’s long-term programme to move the UK tax system towards digital recordkeeping and more regular reporting – and represents a major change to the way some individuals report and manage their income tax.
What will change because of MTD?
The traditional once-a-year Self-Assessment tax return is set to be replaced by a more frequent, digital process.
Under MDT for Income Tax, affected individuals will need to:
- Keep digital records of income and expenses using HMRC-compatible software.
- Submit quarterly updates to HMRC summarising income and expenses.
- Complete a year-end declaration to finalise your tax position.
It’s important to note that the new quarterly updates are not tax payments; previous tax payment dates (normally 31 January and 31 July) remain broadly unchanged.
Looking for handy tax planning tips?
Download our free guide to smarter tax planning for high earners.
Why is MTD being brought in?
The aims of this initiative from HMRC are to:
1. Modernise the system and improve accuracy
MTD aims to bring the current tax system (originally introduced in 1997) up to date,[JJ3.1][KP3.2] whilst reducing scope for manual error and facilitating more “real-time” reporting.
2. Reduce stress for affected individuals
The Self-Assessment deadline is often characterised by stress and anxiety for taxpayers. The more regular intervals are therefore designed to help these individuals manage their obligations more evenly.
3. Support compliance and fair tax collection
HMRC has shared its hopes that, by improving record keeping and visibility, this change will support people to pay the right amount of tax at the right time.
Who will be affected?
The first people required to comply with MTD will be self-employed individuals (sole traders) and landlords who have qualifying income of more than £50,000 per year from self-employment and/or property income.
This income level is based on gross income (before expenses) shown on your most recent tax return. Income such as PAYE employment earnings does not count towards this threshold.
HMRC has confirmed that:
- Those above £50,000 must comply from 6 April 2026, and
- The threshold will reduce to £30,000 from April 2027, bringing more people into the system over time.
As with any upcoming tax changes, the best time to start preparing is now.
To help you get started, we’ve shared a handy step-by-step checklist of actions you can take:
Need a hand setting up for MTD?
Making Tax Digital represents a significant shift in how affected individuals will keep records and report to HMRC – and getting organised early is the best way to avoid last-minute pressure.
If you’d like to discuss your tax planning in more detail, book a free consultation with our team today and we’ll discuss your particular needs and how we can support you should you decide to work with us.
Sources:
HMRC, Making Tax Digital for Income Tax.
Available at: https://www.gov.uk/government/collections/making-tax-digital-for-income-tax
HMRC, Find out if and when you need to use Making Tax Digital for Income Tax.
Available at: https://www.gov.uk/guidance/find-out-if-and-when-you-need-to-use-making-tax-digital-for-income-tax
HMRC, Use Making Tax Digital for Income Tax.
Available at: https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax
HMRC, Use Making Tax Digital for Income Tax: Send quarterly updates.
Available at: https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/send-quarterly-updates
HMRC, Penalties for Making Tax Digital for Income Tax.
Available at: https://www.gov.uk/guidance/penalties-for-making-tax-digital-for-income-tax
HMRC, Making Tax Digital for Income Tax: How it works.
Available at: https://makingtaxdigital.campaign.gov.uk/how-making-tax-digital-works/
HMRC, MTD for Income Tax dates you need to know.
Available at: https://makingtaxdigital.campaign.gov.uk/mtd-for-income-tax-dates/
Important information
This article is provided for general information only and is not intended to be, and should not be relied on as, tax advice, legal advice, investment advice or a personal recommendation. Whether Making Tax Digital applies, and any action you should take, will depend on your individual circumstances. Tax rules and HMRC guidance can change, and their application will vary from person to person. Tax planning is not regulated by the Financial Conduct Authority.