Are you an individual, with income over £50,000 a year from self-employment and/or property? Here’s an important update for you from Hollie Watson, Cloud Manager, and Elizabeth Bello, Tax Manager, of Nordens Chartered Accountants and Advisors.
The government’s ambitious Making Tax Digital (MTD) initiative continues to reshape how individuals manage and accurately report their finances.
From April 2026, MTD for Income Tax will be rolled out – requiring individuals to keep digital accounting records and submit updates to HMRC every three months.
At Nordens, we’re here to help you understand what’s changing, who it affects, and how to prepare.
If you are an individual, with income over £50,000 a year from self-employment and/or property, this update is for you.
What is MTD for Income Tax?
MTD for Income Tax means that self-employed individuals and landlords must:
Keep digital records of income and expenses
Submit quarterly updates to HMRC using approved software
Continue to complete an annual year-end declaration (which will replace the current Self Assessment return)
Paper records or manual returns will no longer meet HMRC requirements once MTD becomes mandatory.
Why is this change happening?
HMRC’s shift to Making Tax Digital aims to:
Reduce common filing errors
Improve financial transparency, and help with better tax planning
Simplify compliance for individuals and small businesses
Modernise the tax system
When will it start?
The rollout will happen gradually, and we are aware HMRC have already begun contacting some of those affected
April 2026: Individuals with combined self-employment and property income over £50,000
April 2027: Those with income over £30,000
April 2028: Those with income over £20,000
Partnerships will join the scheme at a later date, still to be confirmed by HMRC.
It’s important to note that qualifying income is based on total income from these sources, not profits or income from each activity in isolation.
What will you need to do?
Once MTD is in effect, you’ll need to:
Keep all income and expense records digitally using MTD compatible software (such as Xero, QuickBooks, or FreeAgent)
Submit quarterly reports to HMRC within one month and seven days of each period ending
File a final declaration annually to confirm your total income, which will replace the existing self-assessment tax return
This means moving from one annual submission to five submissions per year.
