What is Making Tax Digital?
Making Tax Digital (MTD) is part of HMRC’s ongoing programme to modernise and simplify the tax system. VAT-registered businesses and sole traders have been making MTD returns since 2019 and some taxpayers must now also keep digital records and submit quarterly income tax returns using MTD compatible software.
For income tax self assessment, MTD is now mandatory for landlords, sole traders and the self-employed with an annual income of £50,000. Those with an annual income of £30,000 or more will be pulled into the MTD net from April 2027. This drops to £20,000 from April 2028.
What do I need to do for MTD for income tax self assessment
- Digital record-keeping: You must maintain accurate digital records of all business and property income and expenses using MTD-compatible software
- Quarterly submissions: You will need to submit income and expense information to HMRC every three months. These are cumulative over the tax year, so you will be able to make adjustments to correct any previous submissions in future updates. These are the quarterly update deadlines:
- 6 April to 5 July – due by 7 August
- 6 April to 5 October – due by 7 November
- 6 April to 5 January – due by 7 February
- 6 April to 5 April – due by 7 May
- Final declaration: In your final declaration, you must report additional income sources like investments or savings and submit any claims for relief. This declaration, along with the payment, is due by January 31st following the end of the tax year. This replaces the traditional Self Assessment tax return and ensures all income sources are accounted for.
How we can help
Whether you’re looking for a fully managed solution, support to get started with MTD, or a simple way to remain compliant while continuing to use your existing spreadsheets, Hillier Hopkins offers a range of services to suit your needs. From complete end-to-end compliance management to practical software solutions, we’ll help you meet your MTD obligations with confidence and minimal disruption to your business. Download our services and pricing for sole traders or landlords from the links below.