Still unsure of your MTD responsibilities

If  you have recently joined Making Tax Digital (MTD) for Income Tax, or you are still uncertain about what the new rules mean for you, now is the time to act.

The first quarterly update for many self-employed individuals and landlords was due by 7 August 2026. If you have not yet submitted your first report, you should seek advice as soon as possible to establish your position and avoid any unnecessary compliance problems.

What has changed?

Making Tax Digital represents one of the biggest changes to the UK tax system for many years. Rather than keeping manual records and submitting a single Self-Assessment tax return each year, affected taxpayers must maintain digital accounting records and submit quarterly updates to HMRC using compatible software.

Who is affected?

One of the most common misunderstandings is that the entry threshold, currently £50,000, is based on profit. It is not. Eligibility is determined by the amount of your qualifying income from self-employment and property before expenses are deducted. This means that many people with relatively modest profits may still fall within the new regime. And please note, from April 2027 this threshold is dropping to £30,000.

The quarterly update is not a tax bill

Another point that causes confusion is that the quarterly update is not a tax payment. The reports simply provide HMRC with a summary of your income and expenses during the quarter. Your final tax liability will continue to be calculated after the end of the tax year once all necessary adjustments and claims have been taken into account.

Do not ignore a missed deadline

Although the first filing deadline has now passed (7th August), it is important not to ignore the position if you believe you should have submitted a report. The sooner any issues are identified, the easier they are usually to resolve. Leaving matters until the end of the tax year could result in additional work, unnecessary stress and the possibility of penalties if filing obligations have been missed.

Looking ahead

Even if you are not yet required to join Making Tax Digital, it is worth reviewing your record keeping now. Businesses that move to digital bookkeeping before it becomes compulsory often find that they gain better visibility over their finances and spend less time dealing with paperwork.

How we can help

If you are unsure whether Making Tax Digital applies to you, whether you have met your obligations, or whether your bookkeeping software is suitable, please contact us. We can confirm whether you fall within the rules, help you meet your reporting obligations and ensure you are prepared for future quarterly submissions.

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