The UK government’s Making Tax Digital (MTD) initiative is transforming the way small businesses and landlords manage their taxes. From April 6, 2026, MTD for Income Tax Self-Assessment (ITSA) will become mandatory for a wider range of businesses and individuals.


What Is MTD for Income Tax?

MTD for Income Tax requires eligible businesses and landlords to maintain digital records and submit quarterly updates to HMRC using compatible software. The goal is to streamline tax management, reduce errors, and improve efficiency.


Who Does This Affect?

From April 2026, MTD will apply to: Self-employed businesses and landlords with annual gross income over £50,000.

From April 2027, this expands to: Those with gross income over £30,000.


Key Requirements

Digital Record-Keeping

Businesses and landlords must use MTD-compatible software (e.g., Xero, QuickBooks) to maintain and manage tax records.

Quarterly Updates
Instead of an annual tax return, you’ll need to submit quarterly updates to HMRC. These reports summarize your income and expenses.

End-of-Period Statement (EOPS)
At the end of the tax year, you’ll need to finalize your accounts and submit an EOPS alongside a final declaration.


Impact on Small Businesses and Landlords

Increased Administrative Work
MTD requires regular updates, meaning more frequent record-keeping and reporting.

Opportunity to Improve Financial Clarity
Digital tools make it easier to track cash flow, monitor expenses, and stay compliant.

Potential Costs
Small businesses and landlords may need to invest in new software or seek professional accounting support.


How to Prepare

Adopt Digital Accounting Software
Transition to MTD-compliant software early to avoid last-minute stress.

Understand Quarterly Reporting Deadlines
Plan your updates to ensure you meet HMRC deadlines for quarterly submissions.

Consult a Professional Accountant
Get expert advice to ensure compliance, reduce errors, and save time.


How Supreme Consultants Can Help

MTD for Income Tax is a significant change, but you don’t have to face it alone. At Supreme Consultants, we’ll help you:

Transition to MTD-compatible software.

Stay on top of quarterly updates.

Ensure compliance with HMRC while saving time and reducing stress.

Contact us today for expert support and guidance on MTD for Income Tax.