Making Tax Digital (MTD) is HMRC’s initiative to digitise the UK tax system, replacing the traditional annual Self Assessment return. Starting 6 April 2026, sole traders and landlords with a combined qualifying income over £50,000 must comply. This threshold drops to £30,000 in 2027 and £20,000 in 2028.
Under the new MTD rules, affected taxpayers must:
- Keep digital records of income and expenses using HMRC-compatible software.
- Submit quarterly updates to HMRC.
- Submit a final end-of-year declaration and pay any tax owed by 31 January.
