Making Tax Digital (MTD) For Self Assessment: What You Need to Know Before April 2026
HMRC’s Making Tax Digital (MTD) project is about to bring significant changes to how you report and pay taxes. After several delays, the final phase of MTD will come into effect on 6th April 2026, impacting those with turnover greater than £50,000 from self-employment, rental income, or a combination of both. The changes will introduce quarterly reporting, mandatory use of digital accounting software, and a shift in how tax submissions are handled.
If you’re unsure whether you’ll be affected or what steps to take, this guide breaks down everything you need to know to prepare for the upcoming changes.
What is Making Tax Digital (MTD)?
The Making Tax Digital (MTD) project has been in development by HMRC since its announcement in 2015. After multiple delays, the changes will finally come into effect from 6th April 2026—but only for individuals with a turnover exceeding £50,000 from self-employment, property rental, or a combination of both.
If your turnover exceeded £40,000 in the 2023/24 tax year (ending 5th April 2024), HMRC will begin notifying you about potential changes to your tax obligations.
What Will Change Under MTD?
From April 2026, the way you submit tax information will be completely digital. The key changes include:
Quarterly Reporting
Taxpayers will need to submit updates to HMRC every three months, providing real-time insights into their income and expenses.
End-of-Period Statement (EOPS)
At the end of the fourth quarter, an EOPS must be submitted to finalise the year’s records.
Final Declaration
This will replace the traditional Self Assessment tax return and confirm all tax obligations for the year.
Mandatory Use of Software
Paper records and spreadsheets will no longer be sufficient. Instead, all records must be maintained and submitted using HMRC-approved digital accounting software such as FreeAgent, Xero, or QuickBooks.
What This Means for You
If You Already Use Accounting Software
If you are already using cloud-based software like FreeAgent, Xero, or QuickBooks, the transition will be relatively simple. Your tax submissions will be made directly from the software to HMRC.
If You Currently Send Records Manually
For those who send records to us for processing, this will be a significant change. We’ll need to discuss the best approach for you, whether that means:
• Sending records more frequently for us to process digitally.
• Transitioning to a software-based solution to ensure compliance with MTD.
Future Phases of Maxing Tax Digital (MTD)
This is just the first stage of a broader rollout. Further changes include:
• April 2027: MTD will apply to those with a turnover above £30,000.
• Future phases: Partnerships and individuals with lower turnover will be included, with timelines yet to be announced.
How We’re Preparing for Making Tax Digital (MTD)
We’ve been working with Lancaster University’s Technology in Professional Services programme to ensure we’re implementing the right tools to support our clients over the next 5 to 10 years. Our focus is not only on making the transition smoother for you but also on helping the accounting industry adopt new technologies to improve efficiency.
What You Should Do Now
- Check If You’re Affected – If your turnover is over £50,000, you’ll need to comply with MTD from April 2026.
- Adopt MTD-Compliant Software – If there’s a good business case for it, consider investing in digital accounting software now.
- Start Keeping Digital Records – Getting into the habit of maintaining digital records now will make the transition easier.
- Understand Quarterly Filing Deadlines – Be aware that tax reporting will now happen four times a year instead of just once.
- Seek Professional Advice – If you’re unsure how these changes will impact you, speak to us. We can help ensure you’re compliant while making the most of tax efficiency strategies under the new system.
The Making Tax Digital (MTD) shift is a significant change in how taxes will be managed, but with the right preparation, you can ensure a smooth transition. Whether you’re already using digital accounting software or need to make the switch, it’s important to start preparing now so you’re ready for the upcoming changes.
Remember, we’re here to support you every step of the way. If you have questions or need advice on how MTD will affect your tax situation, get in touch with us—let’s work together to ensure you’re compliant and well-prepared for April 2026 and beyond!
