Making Tax Digital:  Are you prepared?  Key facts you need to be aware of.

​Making Tax Digital (MTD) reporting comes into force this month with the first reporting period up to the 30 June 2026 and changes considerably how landlords and sole traders report their income and how they will pay their taxes. 
 
What used to be a once-a-year reporting system through a tax return will be replaced by a more frequent quarterly system with a final declaration at the end of the year.
 
What will I need to do?
 
Keep up to date accurate records - You will need to record your income and expenses using MTD-compliant software. This can be accounting software like Sage, QuickBooks or Xero. 
 
If you don’t want to use a software company, you can use spreadsheets with "bridging software" to send data to HMRC. 
 
At Mayes we are happy to advise you on the options and help you with each step.
 
Submit your quarterly returns – To replace filing a full tax return every year, you will need submit a summary of your income and expenses every three months.
 
These aren’t a complete tax return but will give HMRC (and you) a more regular guide to your business's tax position throughout the year.

Final Declaration:   At the end of the year a Final Declaration to HMRC will need to be submitted to confirm your total income, claim any allowable reliefs, and settle your tax bill.
 
 
Am I affected?
MTD for Income Tax will affect landlords and sole traders with "qualifying income".
 
This includes all your business earnings or rental income before any expenses are deducted.
 
There are three thresholds coming into force based on your income, who will need to start using the new system and these are as follows: -
 
Commencing 6 April 2026 – If your qualifying income is above £50,000
Commencing 6 April 2027 – If your qualifying income is above £30,000
Commencing 6 April 2028 – If your qualifying income is above £20,000
 
How do I know if I am affected?
 
HMRC will be checking your qualifying income based on your 2024/25 tax return to determine if you need to join MTD starting with the first tranche in April 2026.
If your income exceeds £50,000, you’ll be required to start submitting quarterly updates.
If you are near to the threshold, we would recommend to start preparing now to avoid any last-minute rushing to get software and systems sorted.
 
Key MTD Dates to Remember:
 
If you are in the first wave (starting in April 2026), here are the key dates that you need to consider:-
 
6 April 2026: Digital record-keeping becomes mandatory.
 
7 August 2026: First return due (covering April–June 2026).
 
31 January 2027: Deadline for the final old-style Self-Assessment return (for the 2025/26 tax year).
 
31 January 2028: Deadline for your first MTD Final Declaration.
 
When do I pay my tax?
 
Although reporting is more frequent, the payment dates will stay the same.
 
31 January: Balancing payment and first payment on account.
31 July: Second payment on account.
 
If all the above seems confusing and a little bit too much why not give us a call to see how we can help you.

Published 16 June 2026

​Mayes Accountants
Tel:  01254 300050
Email:  [email protected]