Making Tax Digital for Income Tax: How to Prepare Before the 2026 Deadline

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is set to become one of the biggest changes to the UK tax system in decades. Starting in April 2026, it will affect self-employed individuals and landlords with income over £50,000.

This article is your practical guide to preparing for the transition — so you can avoid penalties and stay compliant.

What’s Changing?

Currently, self-employed individuals and landlords submit one Self Assessment tax return per year. Under MTD for ITSA, you will need to:

  1. Keep digital financial records
  2. Submit quarterly tax updates to HMRC
  3. Use approved MTD software
  4. Submit a final end-of-year declaration

Who Needs to Comply?

From April 2026:

  • Self-employed individuals and landlords with income over £50,000

From April 2027:

  • Threshold lowers to £30,000

If your income is under £30,000, or you are part of a general partnership, you’re not affected yet — but it’s still worth preparing early.
 

How to Prepare — Step by Step

  1. Review Your Income
    If your total business or rental income exceeds £50,000, you’ll need to comply by April 2026.

    2.  

  2. Choose MTD-Compatible Software
    Use HMRC-recognised tools like Xero, FreeAgent or QuickBooks — or ask your accountant for guidance.

    3.  

  3. Start Keeping Digital Records
    Move away from paper or spreadsheets. Maintain invoices, receipts, and transactions digitally.

    4.  

  4. Test Submitting a Digital Return
    Many software tools allow you to practice sending quarterly updates.

    5.  

  5. Get Support from Your Accountant
    A professional accountant can help streamline the transition and keep you compliant.

    6.  

Benefits of Getting Ready Early

  • Avoid last-minute stress and HMRC penalties
  • Improve financial visibility throughout the year
  • Make smarter decisions with real-time data
  • Reduce the chances of reporting errors

How Front Edge Accountants Can Help

At Front Edge Accountants, we’re already helping small business owners and landlords prepare for MTD. Here’s how we support you:

  • One-on-one guidance on MTD obligations
  • Setup and integration of approved software
  • Ongoing digital recordkeeping and support
  • Quarterly update submissions
  • End-of-year declaration filing

Don’t Wait Until 2026

The earlier you start, the smoother your transition will be. Contact us now for a free consultation and let us make your digital tax journey stress-free.