FRC NEWS & GUIDANCE

What is Making Tax Digital?

Making Tax Digital for Income Tax is changing the way some sole traders and landlords keep records and report information to HMRC. Here is a straightforward overview of what it means.

Updated September 2026

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax, often shortened to MTD, is HMRC's digital system for certain people who are registered for Self Assessment and receive income from self-employment, property, or both.

Instead of relying on records that are brought together only at the end of the tax year, people who fall within MTD requirements must use compatible software to maintain digital records and send information to HMRC during the year.

In simple terms

MTD means keeping appropriate business records digitally, using compatible software and providing HMRC with quarterly updates.

Who needs to use MTD?

MTD for Income Tax is being introduced in stages. The date you need to start depends on your qualifying income from self-employment and property.

6 April 2026Qualifying income over £50,000

6 April 2027Qualifying income over £30,000

6 April 2028Qualifying income over £20,000

Qualifying income broadly means your gross income from self-employment and property before expenses. Your individual circumstances determine whether and when the rules apply to you.

What will you need to do?

Keep digital records

Your relevant income and expense records need to be maintained digitally.

Use compatible software

You will need software capable of working with HMRC's Making Tax Digital service.

Send quarterly updates

Summaries of your digital records are submitted to HMRC during the year.

How FRC Bookkeeping can help

Moving to digital bookkeeping does not need to be complicated. We can help you organise your bookkeeping records, move from manual records or spreadsheets to a digital system, set up accounting software and help you understand how to use it.

Our support is provided within the bookkeeping and computerised accountancy systems services for which FRC Bookkeeping is licensed.

OFFICIAL INFORMATION

HMRC Making Tax Digital guidance

Tax rules and individual circumstances can change. For the official requirements, eligibility checks and registration process, always refer to HM Revenue & Customs.

HMRC: Making Tax Digital for Income Tax →Check if and when you need to use MTD →Sign up for Making Tax Digital →Find HMRC-compatible software →

This article provides general information only. HMRC guidance should be used to establish how Making Tax Digital applies to your individual circumstances.