Helping you prosper
Making Tax Digital for Income Tax (MTD for IT) is one of the biggest changes to the UK tax system in a generation.
If you are self-employed or a landlord, it is likely to affect you sooner than you think. As of April 2026, HMRC have been rolling out MTD for IT, requiring many individuals to keep digital records and submit quarterly updates rather than a single annual tax return. Yet despite growing awareness, there is still a great deal of confusion and misinformation about what MTD actually means in practice.
In this blog, we cut through the noise to set out the key facts you need to know, and bust some of the most common myths that may be holding you back from preparing.
What are the facts?
MTD for IT is mandatory for many businesses and landlords.
From April 2026, most self-employed individuals and landlords with income above the threshold will need to comply. This year it is just for income over £50,000. Over the next two years the income threshold will drop to £30,000, then £20,000.
Digital record-keeping is required.
Businesses and landlords must keep digital records of income and expenses using compatible software.
Quarterly updates must be submitted.
Instead of just an annual tax return, affected individuals will need to send HMRC a summary of income and expenses every three months.
Final declaration is still required.
An End of Period Statement (EOPS) and a final declaration must be submitted after the tax year ends. This will include all income, including salaries and pensions, dividends and interest, as well as allowable deductions, such as gift ai. This will be similar to the current annual tax return.
MTD aims to reduce errors.
The system is designed to make tax administration more accurate, efficient, and easier for taxpayers.
Of course, with any major tax change comes a wave of misinformation. Here are some of the most common MTD myths worth clearing up - you may have already come across a few of them.
Myths
MTD means paying tax more often.
In reality, you’ll still pay tax in January and July, but you’ll send HMRC more frequent updates.
You must use expensive software.
There are various software options, including some free or low-cost solutions, that are MTD-compliant.
MTD is only for VAT.
While MTD began with VAT, it is being extended to Income Tax and will include more taxpayers in the coming years.
Spreadsheets are banned.
You can continue to use spreadsheets, provided they are linked to MTD-compatible software for submissions.
All taxpayers are affected immediately.
MTD for Income Tax is being rolled out in stages, so not everyone will be impacted right away.
Conclusion
Whether you are just over the £50,000 income threshold and affected from April 2026, or you have a little more time before the lower thresholds kick in, understanding the rules now will save you stress later. The good news is that complying does not have to be complicated or costly, because the right software and the right support can make the transition straightforward.
If you are unsure how MTD applies to your specific situation, or you would like help choosing the right software and setting up your digital records, speaking to an accountant is the best first step. Most accountants will be able to assist you with as much or little support as you require. Please get in touch with Alison Martin or your usual UHY cloud accounting adviser for further advice.
