If you’re self-employed or a landlord, big changes are coming in how you report your income to HMRC.

Making Tax Digital for Income Tax (MTD IT) is part of the government’s plan to make the tax system more efficient, accurate and easier to manage. Here’s what it means for you.

What Is MTD IT?

MTD IT stands for Making Tax Digital for Income Tax. It expands on the existing MTD rules for VAT and now includes income tax.

Under the new rules, you’ll need to:

  • Keep digital records of income and expenses
  • Submit quarterly updates to HMRC using MTD-compatible software
  • File an End of Period Statement (EOPS) and a Final Declaration each year

Who Will Be Affected?

The rollout is happening in two stages:

  • From April 2026: If you earn over £50,000 a year from self-employment or property
  • From April 2027: If you earn between £30,000 and £50,000

HMRC is still deciding how the rules will apply to people earning under £30,000 and to partnerships.

What Will Change for You?

Here’s what MTD IT means in practice:

Digital Records Only – You’ll need to use approved software. Paper records and spreadsheets won’t be enough.

Quarterly Updates – Instead of a single tax return, you’ll send four summaries of income and expenses each year.

End-of-Year Filing – You’ll still submit final figures using digital software, through an End of Period Statement and Final Declaration.

Better Visibility – With regular updates, you’ll get a clearer view of your tax position throughout the year.

What You Should Do Now

We’ll be in touch with all clients who need to implement this by April 2026, so we can work together to get everything set up smoothly.

Choose the Right Software – MTD-compatible tools like Xero and Dext Solo will help you stay on track.

Go Digital – Start moving your records from paper to digital, and make sure everything is up to date.

Understand the New Process- Learn what’s involved in submitting quarterly updates and year-end filings.

Ask for help – If you’re unsure where to start, or if using software feels like too much, we can handle it for you. From keeping your books up to date to submitting everything to HMRC, we can take care of the whole process.

How Stubbs Parkin can help

We’re here to make your move to digital tax simple.

We can:

  • Offer advice tailored to your business
  • Help choose and set up your software
  • Provide training so you feel confident using it
  • Manage your bookkeeping and file your quarterly and year-end submissions
  • Keep you on track with ongoing guidance

Whether you want to do it yourself or hand it over completely, we’ll support you in the way that works best for you.

Quick MTD IT FAQ

What is it?
A new way to report income tax digitally, replacing the traditional Self Assessment return.

Who does it apply to?
Self-employed individuals and landlords earning:

  • Over £50,000 from April 2026
  • £30,000–£50,000 from April 2027

Do I need new software?
Yes, MTD-compatible software is required.

What do I submit?

  • 4 quarterly updates
  • 1 End of Period Statement
  • 1 Final Declaration

Will I still file a Self Assessment tax return?
No. The digital updates and year-end declarations will replace it.

What happens if I don’t comply?
There could be penalties for not following the rules or missing deadlines.

Still Have Questions?

We’re here to help you get MTD-ready. Whether you’re starting fresh or want to make sure you’re on the right track, let’s talk.