Making Tax Digital (MTD) for Income Tax is now live, marking one of the biggest changes to the UK tax system in recent years.
If you’re a landlord or sole trader, this is no longer something to prepare for, it’s something you should already be actively managing.
What Is Making Tax Digital (MTD)?
Making Tax Digital is HMRC’s move towards a fully digital tax system.
Instead of submitting one tax return per year, you now need to:
- Keep digital records
- Use approved accounting software
- Submit updates to HMRC every quarter
- Complete a final declaration at the end of the year
In practice, this means doing things more regularly, not necessarily doing more work.
Who Is Affected Right Now?
From April 2026, MTD applies to:
- Sole traders
- Landlords
…with combined income over:
- £50,000 (based on your 2024–25 tax return)
If this applies to you, you should now:
- Be registered for MTD
- Have your software set up and working
- Be keeping digital records from the start of April
If one of these isn’t in place yet, that’s the first thing to fix.
Key Dates You Need to Know
MTD has already started, so your focus now is staying on track.
- Start date: 6 April 2026 (or 1 April for some businesses)
- First quarter ends: 30 June or 5 July 2026
- First submission deadline: 7 August 2026
That first deadline will come around quickly, which is why getting your records in order now makes everything easier later.
Who Is NOT Affected (For Now)?
You are not currently affected if you are:
- A limited company director
- In a partnership
- Earning only through PAYE
These groups remain on the existing system for now.
What You Need to Be Doing Right Now
If you fall within MTD, the priority is simple: get the basics right early.
1. Be registered with HMRC
If you haven’t registered yet, this is urgent. Everything else depends on this being in place.
2. Keep digital records from April onwards
Anything from the start of the tax year must now be recorded digitally.
Waiting until the end of the quarter will only make things harder.
3. Use compatible software
Spreadsheets on their own are no longer enough.
You’ll need software such as:
- Xero (for sole traders)
- FreeAgent (for landlords)
The right setup here saves you hours later.
4. Start building simple habits
This is where MTD becomes easy or difficult.
- Upload receipts as you get them
- Keep records weekly or monthly
- Make sure bank feeds are connected
Small, consistent actions now prevent big problems later.
What You Actually Submit
Each quarterly update is straightforward.
It’s based on:
- Income received
- Expenses paid
Usually pulled directly from your bank transactions.
You’re not submitting full accounts each time — just summarised figures.
Why Acting Now Matters
The biggest risk right now isn’t MTD itself — it’s falling behind early.
If you delay:
- Records become harder to track
- Errors increase
- Deadlines feel rushed
If you start now:
- Submissions are smoother
- Your tax position is clearer
- You avoid last-minute stress
The difference between an easy MTD year and a stressful one is what you do at the start.
Common Situation: “I’m Not Fully Set Up Yet”
If you’re reading this and thinking:
“I’m not ready yet…”
You’re not alone.
Many landlords and sole traders are still:
- setting up software
- registering with HMRC
- working out how it all fits together
What matters is not being perfect — it’s getting started now rather than waiting for the first deadline.
What If You Have Multiple Income Streams?
If you have:
- Self-employment income
- Rental income
You’ll need to submit separate updates for each.
This could mean:
- Up to 8 submissions per year
It sounds like a lot, but with the right setup, most of this is automated.
How to Make MTD Easier
MTD becomes much simpler when you keep things consistent.
Use your phone
Take photos of receipts as you go. No build-up, no digging through paperwork later.
Connect your bank
Let transactions flow automatically into your software.
This removes a huge amount of manual work.
Keep things regular
Monthly updates are far easier than trying to catch up every quarter.
Separate business and personal finances
A dedicated account keeps everything clean, simple, and easier to manage.
How Nuvo Can Help
Now that MTD is live, having the right support can save you time and stress.
At Nuvo, we can help with:
- MTD registration
- Software setup
- Ongoing bookkeeping
- Quarterly submissions
- Final declarations
Whether you want full support or just help getting started, we can tailor it to what works best for you.
Final Thoughts
Making Tax Digital is now part of how tax works in the UK.
It’s not about making things harder — it’s about making them more consistent and more visible throughout the year.
If you get your systems and habits right now, everything that follows becomes much easier.
If you’re unsure where you stand or not fully set up yet, the best time to act is now — not when the first deadline arrives.
Frequently Asked Questions
What is Making Tax Digital for Income Tax?
Making Tax Digital is a system that requires landlords and sole traders to keep digital records and submit updates to HMRC every quarter instead of once a year.
Do I need to register for Making Tax Digital now?
If your combined income from self-employment and property is over £50,000 (based on your 2024–25 tax return), you should now be registered and actively using MTD.
When is the first MTD submission due?
The first submission deadline is 7 August 2026, covering the period from April to June or July, depending on your reporting setup.
Do I still need to submit a tax return?
You will no longer submit a traditional tax return. Instead, you’ll submit quarterly updates and then a final declaration at the end of the tax year.
What happens if I don’t comply with MTD?
Failure to comply can result in penalties, missed deadlines, and increased scrutiny from HMRC. Getting set up early reduces the risk of errors and stress.
