MTD for Income Tax

Self-assessment is changing.
What it means for your business.

What is MTD for IT?

Self-employed and landlords must use MTD-compatible software, such as Xero, to keep digital records and send updates to HMRC.

The key dates and deadlines for the MTD for Income Tax roll out are:

  • April 2026 -
    Sole traders and landlords with qualifying income above £50,000

  • April 2027 -
    Sole traders and landlords with qualifying income above £30,000

  • April 2028 -
    Sole traders and landlords with qualifying income above £20,000

Benefits of MTD for IT

Self-assessment is changing. MTD for Income Tax is being mandated by HMRC from April 2026.

Some of the benefits of MTD for Income Tax are:

  • A clearer view of your finances

  • Help with decision-making and planning

  • Automation of routine tasks so less time spent on manual processes

What you need to do

How the MTD for IT rules will affect you.

MTD for IT will require self-employed people and landlords to:

  • Submit four quarterly updates

  • Submit a final declaration by 31 January

  • Keep digital records

  • Use MTD-compatible software

Getting ready ahead of the deadline

Make it easy on yourself ahead of the MTD for IT deadline for your business.

Is your annual income over £50,000?
In that case, you need to be ready by April 2026.

Choose your Xero Plan

Xero Simple

£7

GBP per month
(excludes VAT)

MTD-compatible software

Great for non-VAT registered sole traders and landlords


Key features include

10 invoices per month

Automatically import bank transactions

Reconciling and reporting

Data capture app (Hubdoc)

MTD for Income Tax

Popular
Plan

Xero Grow

£33

GBP per month
(excludes VAT)


MTD-compatible software

Best for unlimited invoicing

Accounting tools for the self-employed and growing businesses


Key features include

Unlimited bills and invoicing

VAT filing

Claim expenses and mileage for 1

Data capture app (Hubdoc)

MTD for Income Tax

Xero Ignite

£16

GBP per month
(excludes VAT)

MTD-compatible software

Accounting basics for businesses starting out


Key features include

20 invoices per month

VAT filing

Bills (enter up to 10 per month)

Data capture app (Hubdoc)

MTD for Income Tax

Prepare now in order to
avoid the stress of rushing to meet the deadline

Ensure that you’re fully compliant with the new regulations and reduce the risk of penalties

FAQs

  • The key dates and deadlines for HMRC’s MTD for IT roll out are:

  • MTD for Income Tax brings benefits for your business.

    Some of the benefits of MTD for Income Tax are:

    • A clearer view of your finances

    • Help with decision-making and planning

    • Automation of routine tasks so less time spent on manual processes

  • MTD for IT will require self-employed people and landlords to:

    • Submit four quarterly updates

    • Submit a final declaration by 31 January

    • Keep digital records

    • Use MTD-compatible software

  • How the MTD for IT rules will affect landlords with jointly-owned property.

    Easements for landlords with joint-owned properties

    Landlords of jointly-owned properties can choose:

    • Not to submit quarterly updates of expenses

    • To keep less detailed digital records

    Check out HMRC’s guidance on easements for landlords (in section 3, Review outcomes)

  • The sooner you get ready, the smoother MTD for IT will be for you.

    By starting to use suitable software for record-keeping now, you will:

    • Be well set up ahead of time (we’ll help)

    • Have time to adjust to new ways of working

    • See the benefits of going digital this tax year

    • Be familiar with the software and be confident about what you need to do, before the MTD for IT deadline arrives

  • If you are sole traders or landlord with qualifying income above £50,000 you need to be ready by April 2026.

    Make it easy on yourself ahead of the MTD for IT deadline for your business.

    Prepare now in order to:

    • Avoid the stress of rushing to meet the deadline

    • Reduce the risk of penalties

    • Ensure that you’re fully compliant with the new regulations

    • L J Rose Accounting will undertake submission of four quarterly updates and submit a final declaration by 31 January, using your Xero plan of choice.

    • Keeping your bank feed, income and outgoings up-to-date using tools within Xero will simplify your quarterly update requirements.

    • Our fees for filing MTD for IT on your behalf will depend on your specific needs, including; bookkeeping requirements, Xero plan subscription, other accountancy services with us.

    • Letters are being sent from HMRC advising a change to the way some need to report their income and expenses.

    • If you receive this letter, follow the instructions in the letter and use the online tool to check if you need to use the MTD for IT service, please see the following website to check if you are eligible:- https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax

    • L J Rose Accounting is providing MTD compatible software from £7+VAT per month, plus additional service fees, to submit MTD for IT quarterly updates and declaration.

    • Our fees for filing MTD for IT on your behalf will depend on your specific needs, including; bookkeeping requirements, Xero plan subscription, other accountancy services with us.

    • Our accountancy team will be in contact with you to update you further on changes to self-assessment filing.

    • Self-employed and landlords must use MTD-compatible software, such as Xero, to keep digital records and send updates to HMRC.

    • We will provide you with options to create your new Xero plan allowing us to file MTD for IT to remain compliant.

    • Check with HMRC online to see if you are eligible to use MTD for IT at: https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax

Next steps