⏳ Making Tax Digital for Income Tax: Time Is Running Out — Are You Prepared?
Starting April 2026, the UK tax system is taking a major leap forward. Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) will become mandatory for sole traders and landlords earning over £50,000, and many are still unaware of what this means for them — or how to get ready.
Worryingly, recent research shows that nearly a third of sole traders who will be affected have never heard of MTD, and nearly half of those who have say they’re not yet prepared.
As ICAEW-qualified accountants, the team at IB Tax & Accounting is already helping clients transition to digital reporting — and we’re here to ensure you’re not left behind.
📌 What Is MTD for Income Tax?
MTD for Income Tax means that sole traders and landlords will need to:
- Keep digital records of income and expenses,
- Submit quarterly updates to HMRC using compatible software,
- And file a final declaration each year to confirm annual figures.
This replaces the traditional once-a-year Self Assessment return for those who fall within the income thresholds.
Key dates:
- April 2026 – If your total income from self-employment and/or property is over £50,000, you must comply.
- April 2027 – The threshold drops to £30,000.
- Lower thresholds (e.g. £20,000) are under consideration for later rollout.
🏘️ Landlords: You’re in Scope Too
It’s not just business income that counts. Landlords are included in the MTD rules — so if your total gross income from property rentals and/or trading exceeds the threshold, you’ll need to comply too.
This includes:
- UK and overseas property income
- Jointly owned property (each owner reports their share)
- Furnished holiday lets
- Multiple property portfolios
Many landlords don’t yet realise they’re affected, but the legislation is clear: if your combined gross income hits the threshold, you’re in.
⚠️ The Reality: Businesses and Accountants Are Underprepared
While the government first announced MTD back in 2015, the reality is that many businesses and professionals are only just starting to focus on it.
- 31% of sole traders affected by the 2026 deadline are unaware of the changes.
- Of those who are aware, nearly half don’t feel ready.
- Many still rely on paper records or spreadsheets, which won’t meet HMRC’s digital requirements.
- A significant number of accountants also admit they haven’t fully prepared their clients — and many are still using HMRC’s soon-to-be-retired portal for submissions.
For businesses, this creates uncertainty. For accountants, it brings workload pressure — especially with quarterly deadlines now compressing reporting into four intense months: April, July, October, and January.
✅ How IB Tax & Accounting Can Help
At IB Tax & Accounting, we’re here to simplify the transition — and take the stress out of MTD. As ICAEW-qualified accountants, we’re trusted professionals who stay up to date with the latest legislation, technology, and HMRC guidance.
Here’s how we can support you:
🔍 1. MTD Readiness Check
We’ll assess whether you fall within the MTD income thresholds, and help you understand what’s changing and when. This is especially helpful if you have multiple income streams or jointly owned property.
💻 2. Software Setup & Integration
We’ll guide you in choosing and setting up HMRC-recognised software that suits your business or rental situation — and help you move away from spreadsheets or paper records.
📅 3. Quarterly Filing Made Easy
Whether you want to file updates yourself or have us do it for you, we’ll ensure your submissions are accurate, timely, and fully compliant. We also handle the annual declaration to tie everything together.
🧾 4. Tailored Support for Landlords
We know rental income isn’t always straightforward. From multiple properties to overseas lettings and complex ownership structures, we help landlords report correctly — and claim allowable expenses effectively.
🤝 5. Ongoing Advice & Digital Training
Need help getting confident with digital systems? We’ll train you or your team on using your new software, understanding MTD workflows, and spotting tax-saving opportunities during the year — not just at year-end.
📈 6. Scalable Support for Growing Businesses
If your income is approaching the MTD threshold, we’ll help you plan ahead — so when it’s your turn to comply, you’re ready. And if you need regular support, we can tailor a package that grows with you.
📬 HMRC Is Sending Letters — But Don’t Wait
HMRC has started writing to taxpayers it believes will fall within the new MTD rules. But with limited communication so far and few detailed resources, it’s no surprise that many are confused or unaware of what they need to do.
If you’re a sole trader or landlord and you’re unsure whether you need to act — now is the time to get clarity.
🗓️ Don’t Leave It Too Late
The shift to Making Tax Digital is one of the biggest changes to the UK tax system in recent years. And while it promises greater transparency and efficiency in the long term, it also brings more deadlines, new software, and potential penalties if you’re not ready.
With our help, you don’t need to navigate it alone.