The most significant of the MTD deadline changes is now close enough to affect everyday bookkeeping decisions. From 6 April 2026, many sole traders and landlords will need to keep digital records and send quarterly updates to HMRC under Making Tax Digital for Income Tax. For business owners already balancing customers, suppliers, staffing and cashflow, this is not something to leave until the last month of the tax year.
The practical point is simple: MTD works best when it is built into your normal financial routine. Good records give you a clearer view of profit, tax and cash throughout the year. Poor records can turn four new filing dates into four avoidable pressures.
What are the MTD deadline changes?
Making Tax Digital for VAT has been in place for VAT-registered businesses for several years. The next phase, Making Tax Digital for Income Tax Self Assessment, often shortened to MTD for Income Tax, applies to qualifying self-employed people and landlords.
The implementation timetable has changed more than once. The original start date was postponed, and the income threshold has been introduced in stages. The current timetable is:
- From 6 April 2026, individuals with qualifying income above £50,000 must join.
- From 6 April 2027, the threshold falls to qualifying income above £30,000.
- From 6 April 2028, it is due to fall to qualifying income above £20,000.
For the 2026 start, HMRC will generally use information from your 2024/25 Self Assessment tax return to decide whether you need to comply. That makes the accuracy and timely submission of this return particularly important.
Qualifying income means your gross income from self-employment and property before expenses are deducted. It is not your profit. If you run a small consultancy with turnover of £35,000 and receive gross rental income of £18,000, your qualifying income is £53,000. You may therefore fall within MTD, even if your taxable profit is considerably lower.
This combined-income rule is easy to miss, especially for directors with a side business, landlords with more than one property, or individuals moving between employment and self-employment. Employment income and pension income do not count towards the qualifying-income threshold, but they can still be reported as part of your final tax position.
The new MTD reporting deadlines in practice
Once you are within MTD for Income Tax, you will keep records digitally using compatible software or, where appropriate, a compliant spreadsheet solution connected to HMRC. You will submit quarterly updates covering your business and/or property income and expenses.
For those using the standard tax-year quarters, the periods and deadlines will normally be:
| Period covered | Quarterly update due | |—|—| | 6 April to 5 July | 5 August | | 6 July to 5 October | 5 November | | 6 October to 5 January | 5 February | | 6 January to 5 April | 5 May |
There may be an option to use calendar quarters, which can be easier for some businesses because they align with management accounts and VAT reporting periods. The right approach depends on how your bookkeeping, VAT returns and financial reporting are currently organised.
A quarterly update is not a tax return and it does not normally create a new quarterly tax payment. It is a summary of the digital records held for that period. You will still need to complete an end-of-year process, including a final declaration, by 31 January following the end of the tax year.
The familiar tax payment dates also remain relevant. Where payments on account apply, they are generally due on 31 January and 31 July, with any balancing payment due by 31 January. The benefit of more regular records is that there should be fewer surprises when those dates arrive.
Who needs to act before April 2026?
The first group affected will mainly be sole traders and landlords with combined gross business and property income over £50,000. If you have more than one sole trade, or both trading and rental income, the figures are added together.
Partnerships are not included in the first phase of mandatory MTD for Income Tax. Limited companies are also outside this particular rollout. However, that does not mean a company director can ignore the changes. A director may still have rental income or a separate sole trade that brings them within scope personally. Their company may also already have MTD for VAT obligations.
Some people will be exempt, including those who are digitally excluded because it is not reasonably practical for them to use digital tools. Exemption is not automatic, so it should be considered early rather than assumed. There are also particular arrangements for certain complex cases, which is why personal advice is valuable where income sources do not fit a straightforward pattern.
Why leaving MTD until 2026 can be costly
The risk is not simply missing a filing date. A hurried switch can result in incomplete data, duplicated transactions, uncategorised expenses and no reliable view of the tax position. That weakens decision-making at the same time as it raises compliance risk.
For a growing Manchester business, bookkeeping is more useful when it supports the business rather than trails behind it. Accurate records can show whether a new service is profitable, whether debtor days are increasing, or whether costs are creeping up before cash becomes tight. MTD creates a reason to improve that information flow, but the commercial benefit comes from using the numbers regularly.
There is a trade-off to consider. Software has a cost, and setting up a clean process takes time. Yet the alternative is often paying for last-minute correction work after a year of disorganised records. A fixed monthly bookkeeping process is usually easier to budget for and gives owners more confidence in the figures they are relying on.
Preparing for the MTD deadline changes now
Start by checking your 2024/25 Self Assessment return and calculate your combined gross self-employment and property income. Do not judge eligibility by the money left after expenses or by the amount withdrawn from the business.
Next, review how records are currently kept. If invoices, receipts and bank transactions are spread across paper files, personal accounts and several apps, bring them together before changing software. A software package cannot correct a process that has never been defined.
You should also separate business and personal spending as far as possible. A dedicated business bank account gives cleaner information, reduces time spent explaining transactions and makes quarterly reporting far less disruptive. Landlords should take the same approach with rental income and property costs, particularly where several properties are involved.
Finally, agree who will do what. Some owners want to maintain their own records and have their accountant review the position each quarter. Others prefer their bookkeeping to be managed for them, with regular explanations of the numbers. Both approaches can work, provided responsibilities, deadlines and access to the software are clear.
Make the reporting routine work for your business
MTD should not become another administrative chore that steals attention from customers and growth. With the right system, the quarterly cycle can become a useful financial check-in: what has changed, what tax may be building up, where is cash being tied up, and what needs attention before the next quarter?
RK & Co can help business owners, landlords and self-employed clients assess whether the new rules apply, organise digital bookkeeping and turn regular financial information into practical, simple advice. Starting early gives you time to choose a process that suits the way you work – and keeps your focus where it belongs: on building a more profitable, resilient business.