Making Tax Digital for Income Tax (MTD) is a significant change that will impact the self-employed and landlords from April 2026. Change can often be met with reluctance and procrastination, because it is new and unknown. The fact remains that anyone self-employed or a landlord with an annual business or property income of more than £50,000 (based on 2024/25 earnings) will need to start preparing for MTD.
If you’re self-employed or a landlord earning less than £50,000, MTD will still apply to you, but not until April 2027 or April 2028. We outlined the MTD rollout thresholds in our blog, “The countdown to MTD for Income Tax is on.”
The importance of preparing for MTD.
What is essential to being prepared for MTD is using MTD compatible software. This software will allow you to maintain digital records and submit the required quarterly updates to HMRC. Remember, the aim of MTD is to reduce the tax gap and bring the tax system closer to real-time. MTD compatible software will save you time and reduce the potential for data entry errors. This means your tax bills will be more accurate, which means you can budget with confidence.
If you don’t use MTD compatible software yet (perhaps you still use spreadsheets), now is the time to research the various software providers. The ones most popular with the self-employed and landlords are Xero, FreeAgent, and QuickBooks. They all have their pros and cons – it’s about finding the right one which suits the needs of your business and how you like to work.
Who needs to start preparing for MTD?
As outlined above, any landlord or self-employed person with an annual property or business income of more than £50,000 needs to prepare themselves for MTD for Income Tax, which comes into place from 6 April 2026.
It’s estimated that 1.4 million landlords and 900,000 sole trader businesses will be impacted by the April 2026 changes. Are you one of them?
How Accounting Clarkes can help you prepare for MTD for Income Tax.
With over four decades of experience across the team, helping businesses of all shapes and sizes grow sustainably, we understand the support and guidance that sole traders and landlords need. Our knowledge and experience have shaped two MTD solutions, which we’re delighted to share with you in this article.
Option 1 is designed for business owners who would like to manage their own bookkeeping and quarterly submissions to HMRC. Accounting Clarkes takes care of the annual review, including adjustments, and the annual self-assessment. All the major software providers are offering free training for MTD to demonstrate how to complete the quarterly submissions. If you are unsure where to find them or would like training in person with one of our team, do get in touch.
Option 2 is designed for business owners looking for a full-service solution to manage their tax reporting obligations. From quarterly bookkeeping, reviews and submissions, through to the Final Declaration (your annual self-assessment), this package takes care of it all. Our outsourced solution will utilise the Ignite package from Xero.
Click here to view our MTS Package Pricing or contact Gillian Clarke for more details and to set up a discovery call: gillian@accountingclarkes.co.uk or call 01252 612484.
