A Simple Guide to MTD for Self-Assessment Before April 2026

 

Are you ready for the changes to how you’ll report your income for tax purposes? From April 2026, HM Revenue & Customs (HMRC) is extending Making Tax Digital (MTD) to cover Income Tax Self Assessment (ITSA). Self-employed individuals and landlords will need to keep digital records and send updates every three months instead of filing once a year.

 

MTD might seem like another layer of admin, but using the right software and working with a qualified Self Assessment accountant can make the process manageable and give you a clearer view of your finances.

 

 

What is Making Tax Digital for Income Tax?

 

MTD for Income Tax is the next step in HMRC’s plan to modernise the UK tax system. The initiative began with VAT in 2019 and is now being extended to individuals and businesses filing Self Assessment returns.

 

If you fall within scope, you’ll need to:

 

· Keep digital records of business and property income, plus allowable expenses.

 

· Submit quarterly updates to HMRC through MTD-compatible software.

 

· Make a final declaration at year-end to confirm total income and adjustments.

 

Every transaction will be logged digitally as it happens instead of piecing together paperwork at the last minute.

 

Who does MTD apply to?

 

From April 2026, MTD will apply to:

 

· Sole traders with business income of £50,000 or more

 

· Landlords with rental income of £50,000 or more

 

· Individuals with combined income from self-employment and property above the threshold

 

If you meet the threshold, here’s what changes:

 

· Digital record keeping - All business and property income, plus expenses, must be recorded through HMRC-approved software. Paper records and spreadsheets won’t be enough.

 

· Quarterly updates - Every three months, you’ll submit income and expense summaries through your software. HMRC will return an estimated tax calculation based on the data, but payment will still follow the usual Self Assessment deadlines.

 

· Final declaration - At the end of the year, you’ll complete a digital declaration to finalise your accounts and include any other personal income (such as savings or dividends). This replaces the traditional annual return.

 

What counts as qualifying income?

 

Only income from self-employment and property counts towards the MTD threshold, and it must be measured before expenses.

 

Included:

 

· Sole trader business income

· Gross rental income (UK or overseas)

 

Excluded:

 

· PAYE wages and benefits

· Pensions

· Savings interest and dividends

· Capital gains

· Partnership income (until 2027 at the earliest)

· Social security benefits or trust income

 

Do you run multiple businesses or own several rental properties? Then you must add the gross income from all of them together.

 

When MTD doesn’t apply

 

You won’t need to comply if:

 

· Your qualifying income is below the threshold

· You aren’t required to file a Self Assessment return

· You’re part of a general or complex partnership (for now)

· HMRC grants you an exemption due to age, disability, insolvency, or another valid reason

 

 

How to prepare for MTD

 

The best way to avoid last-minute stress is to prepare now.

 

· Add up your gross self-employment and rental income to see if you meet (or are close to) the threshold.

 

· Switch to MTD-compatible software. HMRC will only accept submissions through approved platforms. Choose one that records every transaction digitally, submits quarterly updates, and files your year-end declaration. Bank feeds and invoicing features will make tracking easier.

 

· Move away from manual records and log income and expenses digitally in real time.

 

· Learn the system. Set aside time for training, either through your provider or your accountant.

 

· Plan for quarterly submissions. Schedule time to reconcile records each quarter so reports are accurate.

 

· Work with a Self Assessment accountant. Agree on who handles record keeping, submissions, and troubleshooting.

 

· Test the pilot scheme. HMRC’s voluntary pilot gives you a chance to practise before the rules become mandatory.

 

 

 

Penalties for late submissions

 

Under MTD, every missed quarterly or year-end submission earns a penalty point. The only way to stay clear of penalties is to file on time, which means keeping your records digital and ready before each deadline.

 

 

Get support from a Self Assessment accountant.

 

Allenby Accountants works with clients across London to simplify Self Assessment and prepare them for MTD. Call us today on 0208 914 8887 and let’s make sure you’re ready well before April 2026.

 

 

 

Tax Accountant London: Your Shortcut to Stress-Free Filing

 

Keeping your finances in order can quickly become overwhelming, especially when you’re juggling the demands of running a business or working as a busy professional. A tax accountant in London helps you make sense of changing regulations and avoid costly mistakes. Whether you're self-employed or running a company, they take the pressure off so you can focus on growth instead of paperwork.

At Allenby Accountants, we help individuals and businesses stay financially organised and compliant. Here’s how our London-based tax experts can help you file confidently:

 

Specialist knowledge you can rely on

Our accountants keep up with the latest tax regulations so that your self-assessment is always fully compliant and accurate with HMRC. We also help reduce your tax bill by making sure you don’t miss out on available allowances and deductions.

 

Stay compliant even as rules change

Tax rules evolve constantly and it can be hard to stay informed while managing a business or career. Our tax accountant in London makes sure that your filings follow current regulations, helping you avoid fines or extra scrutiny from HMRC. You’ll get reliable support that keeps your tax responsibilities up to date and off your plate.

 

Never miss a deadline

Late returns or delayed payments can result in penalties and added stress. Our team takes a proactive approach, ensuring all documentation is filed correctly and on time. That means fewer surprises and more time to focus on your goals, not government paperwork.

 

Find ways to reduce your tax bill

In addition to basic tax filing, our tax accountants look for legitimate ways to help you save — from exemptions to reliefs and smart use of available deductions. The result? Lower tax liability and more control over your finances.

 

Make your financial management easier

Running a business or managing your own income doesn’t have to feel like a constant struggle with spreadsheets. Our tax accountant in London helps simplify your financial picture with clear reporting and smart planning to improve cash flow. You’ll gain valuable insight and free up more time for what matters most.

 

Keep your records accurate and up to date
Bookkeeping often takes a back seat when you’re running a business. You might only get to it when time allows, and that can lead to issues like:

· Incomplete and outdated records

· Mistakes in your financial entries

· Overlooked tax deductions

· Missing paperwork, including receipts tied to allowable expenses

 

A professional tax accountant in London helps you stay organised by ensuring that your records are accurate and properly maintained. They may also recommend accounting software that makes it easier to log your income and expenses as they happen, to cut down on manual work and keep everything ready for when you need it.

Breeze through complex tax requirements

If you have multiple income sources (like investments or self-employment), your tax return can become complicated quickly. This is where expert help matters. At Allenby Accountants, we make sure that each income stream is handled in the most tax-efficient way possible.

 

When we have a full picture of your earnings, we can structure things to help you reduce your overall tax bill, not just stay compliant. And we don’t stop at filing. Our tax accountant in London can guide you on smart tax planning and long-term financial decisions.

 

Get advice that fits your goals

In addition to taxes, our tax accountants offer tailored guidance across your personal and business journey. You’ll benefit from advice shaped around your goals and circumstances, whether you’re thinking of scaling up operations or planning your finances for retirement. That kind of insight helps you move forward confidently and avoid missteps along the way.

Let us help you file stress-free

Call Allenby Accountants today at 0208 914 8887 to arrange your free initial consultation with a tax accountant in London.