Making Tax Digital for Income Tax: What You Need to Know
If you haven’t yet checked whether you need to follow Making Tax Digital (MTD) for Income Tax, now is the time to do it. From April 2026, the way many people report their tax to HMRC will change. MTD replaces the once‑a‑year Self-Assessment return with a digital system where you keep records online and send updates more often.
Who Will Need to Use MTD?
MTD is being introduced in two stages:
- From 6 April 2026: Self‑employed individuals and landlords with more than £50,000 in qualifying income
- From April 2027: Those with £30,000 or over in qualifying income
Qualifying income includes everything you earn from self‑employment and property — even if you have several businesses or rental properties. It does not include PAYE income, pensions, dividends or partnership income.
What Will You Have to Do?
If MTD applies to you, you will need to:
- Keep digital records of your income and expenses
- Send quarterly updates to HMRC
- Submit a final declaration after the tax year ends
- Pay any tax due by 31 January as usual
A new points‑based penalty system will also apply if updates or payments are late.
Need Help Getting Ready?
If you’re unsure whether MTD applies to you or you want support preparing for the changes, Lexicon Tax is here to help you get everything in place smoothly.
