From 6 April 2026, the way many self-employed people and landlords report income to HMRC changes for good. Making Tax Digital for Income Tax replaces the single annual Self Assessment return with digital record keeping, compatible software and quarterly updates. If your gross income from self-employment and property was over £50,000 in the 2024-25 tax year, you are in the first wave, whether you feel ready or not.
The frustrating part is how many people this catches by surprise. Research suggests a large share of affected taxpayers still do not know what the rules ask of them. Here are ten practical tips to get Making Tax Digital sorted before it starts biting.
1. Check Whether the Threshold Actually Applies to You
The £50,000 figure is gross income, not profit. That trips people up straight away. HMRC looks at your total turnover from self-employment plus your gross rental income before any expenses or mortgage interest come off.
Add both sources together. If a sole trade brings in £29,000 and rental income is £22,000, that is £51,000 gross, and you are in from April 2026 even though your profit after costs might be far lower. Employment income and pension income do not count towards the threshold, only self-employment and property.
2. Understand How Jointly Owned Property Is Counted
If you own a rental property jointly, only your share of the gross rent counts towards your threshold. A property earning £70,000 a year, owned 50/50, gives each owner £35,000 towards their own figure.
This creates odd situations in households. One partner who owns extra properties in their sole name can cross £50,000 and land in Making Tax Digital, while the other stays below it and outside the rules, at least for now. Work out each person's share separately rather than looking at the household total.
3. Don't Wait for HMRC to Contact You
HMRC uses your most recent Self Assessment return to identify who needs to comply, and many people have already had a letter. But registration is not automatic. Even if HMRC writes to you, you still have to sign up yourself.
Do not treat silence as an exemption either. If you believe your income crosses the threshold and no letter has arrived, check your own figures and act. Assuming you are off the hook because nothing landed in the post is exactly how people miss the start date.
4. Move Off Paper and Spreadsheets Now
Paper records will no longer meet the requirements. Standalone spreadsheets do not count on their own either, unless they connect to HMRC through approved bridging software. This is the single biggest practical change for anyone still keeping a shoebox of receipts or a manual ledger.
The businesses that struggle most in April are the ones that leave this until the last week. Getting your income and expenses into a digital system early gives you months to iron out the process before it counts for real. Setting up MTD-ready bookkeeping is exactly the kind of work Aspire's bookkeeping and VAT support handles for sole traders and landlords, so the software side is done properly from the start.
5. Choose HMRC-Recognised Software Early
Not every accounting package is built the same, and not all of them handle landlord situations well, especially jointly owned properties and multiple income streams. Pick software from HMRC's recognised list, and pick it before April rather than in a panic afterwards.
Free options exist for simpler situations. Once your income and expenses are recorded, the software totals your figures and generates the summary to send to HMRC. The point of choosing early is the same as with digital records: you want to be familiar with the tool before your first real submission is due.
6. Get Used to Quarterly Updates
Instead of one return a year, you send four quarterly updates plus a final declaration. Each quarterly update is a summary of your income and expenses for that period, submitted through your software. HMRC has been clear these are not four extra tax returns, they are lighter running totals.
The mental shift matters more than the mechanics. Making Tax Digital turns you from a once-a-year filer into someone who keeps books current all year round. Landlords in particular find this changes how they see the business, moving from a year-end scramble to something that runs more like an actual company.
7. Know the Final Declaration Still Replaces Your Tax Return
After the fourth quarterly update, you submit a final declaration. This confirms your total figures for the year and replaces the Self Assessment return you used to file. Much of it will feel familiar, because the software already holds the numbers from your quarterly updates.
One thing worth flagging: once you are inside Making Tax Digital, HMRC's existing online filing service is no longer available to you for that income. The final declaration through compatible software becomes the way you finish the year.
8. Don't Confuse the 2025-26 Return With Your First MTD Year
The timing catches people out. If you join in April 2026, you still file your 2025-26 tax return the normal way by 31 January 2027, because that year ends before Making Tax Digital begins. Your first MTD year is 2026-27, and its final declaration is due by 31 January 2028.
So April 2026 does not mean your very next return changes. It means the tax year starting on that date is the one reported the new way. Keep the two separate in your head, or you risk thinking a deadline has moved when it has not.
9. Use the First-Year Penalty Grace Period Wisely
The government has confirmed that people joining in April 2026 will not receive penalty points for late quarterly updates during the first 12 months. After that, a points-based system applies, similar to MTD for VAT, where a £200 penalty only kicks in once you reach four points.
Treat this grace period as time to build the habit, not time to ignore the rules. Late tax payments and a late final declaration can still attract penalties even in year one. The buffer is there so occasional early slip-ups on quarterly updates do not cost you, not so you can put the whole thing off.
10. Get Advice Before the Start Date, Not After
Making Tax Digital is more than a software swap. It affects how often you touch your records, how jointly owned property is reported, which allowances apply, and how your year-end works. The people who invest early in the right setup and advice cope far better than those who treat it as a box to tick.
If you are unsure whether you are in scope, or you want your digital records and quarterly submissions handled properly from day one, speak to ASPIRE UK TAX ACCOUNTANTS before April rather than after your first deadline slips.
Getting Ready the Right Way
Making Tax Digital for Income Tax is already law and already live for those over £50,000. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, so even if this round misses you, the next one likely will not. Preparing now, choosing software, setting up digital records, and getting comfortable with quarterly updates, turns a stressful deadline into a routine.
ASPIRE UK TAX ACCOUNTANTS is an ACCA registered UK practice helping sole traders, landlords and SMEs with Making Tax Digital, bookkeeping, Self Assessment, VAT, tax planning and HMRC support, with MTD-ready systems built to keep you compliant.
