Making Tax Digital Explained: What You Need to Know in 2026
- Culverhouse & Co
- Jul 27
- 2 min read
Updated: Jul 29
Making Tax Digital (MTD) is one of the biggest changes to the UK's tax reporting system in recent years. If you're a landlord or self-employed, it's important to understand how the new rules could affect you and what you need to do to stay compliant.
IMPORTANT INFORMATION
Earning more than £50,000 a year from your property business and/or self-employment income?
You will need to submit quarterly updates - as opposed to just an annual return.
The first of these documents is due for digital submission on 7th August 2026.
What Is Making Tax Digital?
Making Tax Digital is a government initiative designed to modernise the UK tax system.
Instead of keeping paper records and submitting a single annual Self Assessment tax return, eligible taxpayers must:
Keep digital records of their income and expenses
Use HMRC-compatible software
Submit quarterly updates to HMRC
Complete a final end-of-year declaration
While the way you report your income is changing, the amount of tax you pay and your payment deadlines remain the same.
Moving to digital record-keeping may seem like a significant change initially, but many businesses find it helps them stay organised and reduces the pressure of preparing everything at the end of the tax year.
Who Does Making Tax Digital Apply To?
Making Tax Digital for Income Tax is being introduced in stages.
Currently, it applies to landlords and sole traders with qualifying income of £50,000 or more.
The thresholds will reduce over the coming years:
From April 2027: Individuals with qualifying income of £30,000 or more
From April 2028: Individuals with qualifying income of £20,000 or more
If your income falls within these thresholds, it's worth preparing well before your reporting obligations begin.
What Do You Need to Do?
If you're affected by Making Tax Digital, you'll need to:
Register for Making Tax Digital with HMRC (if required)
Keep your financial records digitally
Use compatible accounting software
Submit quarterly updates on time
Complete your end-of-year declaration
Moving to digital record-keeping may seem like a significant change initially, but many businesses find it helps them stay organised and reduces the pressure of preparing everything at the end of the tax year.
Why You Shouldn't Leave It Until the Last Minute
Many individuals and businesses only think about tax when a deadline is approaching.
With Making Tax Digital, keeping your records up to date throughout the year is more important than ever.
Good bookkeeping and regular reviews can help you:
Stay compliant with HMRC requirements
Reduce last-minute stress
Keep accurate financial records
Gain a clearer picture of your business performance
Being prepared also makes the transition to quarterly reporting much smoother.
How Culverhouse & Co Can Help
Whether you're a landlord or self-employed, understanding your Making Tax Digital obligations can feel overwhelming.
At Culverhouse & Co, we help businesses and individuals prepare for Making Tax Digital by ensuring records are maintained correctly, software is suitable for HMRC requirements, and reporting obligations are met on time.
If you're unsure whether Making Tax Digital applies to you, or you'd like support with the transition, our team is here to help.
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