Get ready for Making Tax Digital for Income Tax

What’s required?

Making Tax Digital for Income Tax (MTD IT) will affect how you keep records as well as how often you report to HMRC, so you need to take practical steps now to prevent problems cropping up later.

In a nutshell, you’ll be required to:

• sign up for the service before April 2026
• keep digital records of self-employment or property income and expenses
• send quarterly updates to HMRC summarising income and expenses; and
• submit your end-of-period statement and final declaration using software that works with HMRC’s system.

Start by signing up

HMRC may have written to you to tell you that you need to join MTD IT but unfortunately it won’t sign you up automatically. Signing up is therefore your first practical action and needs to be done before MTD IT starts in April 2026 (see further information). If you already use an accountant, they can do it for you.

Your accountant will need a fresh authorisation to access your MTD IT account. Existing authorisation for self-assessment access won’t transfer automatically.

Record keeping

MTD IT requires digital records to be kept in compatible software. This means income and expenses should be recorded regularly, not reconstructed at the year end. So now is the time to review your current record keeping system.

Tip. Update records in real time as leaving it until the end of the quarter increases the risk of missing income or expenses.

Choose the right software for you

You will need HMRC-compatible software to submit quarterly updates. There is no single “best” option, and the right choice depends on how complex your affairs are.

There are two main types of software, one that creates records for you by connecting to your bank account, or having invoices uploaded to it, and one that connects to your own records, e.g. a spreadsheet or accounting software.

When choosing software, consider how easy it is to use, bank feed integration, support and long-term costs. Tip. There’s an HMRC tool to help you find software (see Further information ).

New routine

MTD IT is as much about process as technology. Setting aside time each month to review transactions will make quarterly submissions far easier. If you currently rely on paper records or spreadsheets that you update once a year, you’ll need to change your habits. MTD IT changes reporting, not when tax is paid. Payments on account still apply unless rules change in the future.

Which quarters?

Under MTD IT, the default position is that the quarters will follow the tax year, i.e. 6 April, 6 July, 6 October and 6 January. If you’d prefer to use calendar quarters you can elect to do so when you sign up to MTD IT.