A man sitting at a desk with a laptop, with digital images of TAX, a calculator, and a percentage icon floating in front of the screen
Making Tax Digital goes live

More than 10 years after Chancellor George Osbourne first announced the ‘death of the tax return’, Making Tax Digital (MTD) has finally gone live for the first wave of Income Taxpayers. Although (spoiler alert), MTD does not kill off the tax return even for those it affects. 

The Government’s flagship tax digitalisation and modernisation programme is one of the biggest changes to the tax system in recent years and aims to improve record keeping practices and help close the tax gap by reducing the risk of errors, particularly among small businesses. 

Under MTD, sole traders and landlords have to keep digital records and submit quarterly updates and an MTD tax return using compatible software if their annual business income before expenses is more than £50,000. This income threshold drops to £30,000 from April 2027, then to £20,000 in April 2028, which is forecast to bring more than 2.9 million taxpayers into the new regime. 

Myth busting

Not all employers and not all businesses will be affected by MTD. It doesn’t apply to:

  • Companies, partnerships or Limited Liability Partnerships.
  • Taxpayers with qualifying income below the relevant MTD income threshold.
  • Any sources of income other than self-employment and property – if you’re an employee with no other income it won’t affect you.
  • New sole traders or landlords – you have to file a conventional Self-Assessment tax return reporting the income first, before MTD can apply to you. 

Key actions for those affected

If you’re in scope of MTD from April 2026, some recommended first steps are to:

  1. Understand what MTD involves. The key requirements are keeping business records digitally, submitting quarterly updates of income and expenses to HMRC, and filing an MTD tax return – all of which has to be done in software. 
  2. If you have a tax adviser or accountant, talk to them to agree responsibilities and how you will keep compliant with the new rules. 
  3. Consider whether you might qualify for any exemptions from MTD, and apply to HMRC if needed. 
  4. Choose software (there’s no GOV.UK online filing service in MTD). 
  5. Sign up for MTD (or agree that your tax adviser will do this for you). 
  6. Start keeping digital records of your business income and expenses. 
  7. Submit quarterly updates on time – the first one is due by 7 August 2026. 

If you might be brought into MTD later, looking at these steps early will help you prepare. 

ATT resources can help

The ATT has a wealth of resources on MTD which are available via our MTD homepage to help businesses and landlords get up to speed. The following may be of help:

If you’d like help with MTD, you can use our Find an ATT member service to find a qualified tax adviser. 

 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.   

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