By Mo Hussein
2 min read
Who it applies to
Making Tax Digital for Income Tax is for sole traders and landlords who file Self Assessment. Since 6 April 2026 it has applied to anyone whose qualifying income is over £50,000. From April 2027 that drops to £30,000. The government has said it will drop again to £20,000 from April 2028, with legislation to confirm it.
Qualifying income means your gross income from self-employment and property, before expenses. It isn't your profit, and that catches people out. A business turning over £40,000 with £25,000 of costs is counted at £40,000.
Partnerships are due to follow at a later date.
If you trade through a limited company
This part of Making Tax Digital is about Income Tax, so a limited company's own tax return isn't part of it. If you're VAT registered, you'll already be using Making Tax Digital for VAT. That's a separate set of rules, and it's easy to mix the two up.
What changes day to day
For the people it applies to, there are three practical changes:
- Your records have to be kept digitally, not in a paper book or a shoebox of receipts.
- You send HMRC a summary of your income and expenses every quarter, through software that works with Making Tax Digital.
- You still finish the year with a final declaration, much as you do now.
Spreadsheets are still allowed, with a bridge
You don't have to give up a spreadsheet you trust. You can keep records in one and use bridging software to send the updates to HMRC. For most people, though, this is the push to move onto proper accounting software, and that's usually the right call.
Where custom software fits, and where it doesn't
Please don't build your own tax submission tool. Mainstream accounting software already handles that, and it's what your accountant will expect.
Where we do help is upstream. If your jobs, timesheets or invoices live in another system and someone retypes the totals into your accounts every quarter, that's the bit worth fixing. A connection that moves those figures into your accounting software means the quarterly update is a check, not an afternoon of copying.
This isn't tax advice. Your accountant knows your situation, and they're the right person to confirm whether and when it applies to you.
