Making Tax Income Tax Digital (MTD): What You Need to Know – Updated April 2025
HMRC’s Making Tax Digital for Income Tax (MTD for ITSA) initiative was confirmed
in the recent UK Government’s Spring Statement and will start with a phased rollout starting April 2026.
This major change will affect individuals and businesses with income/turnover from self-employment and property, including landlords, and will fundamentally change the way your financial information is submitted to HMRC.
Who will be affected and when?
- April 2026: Individuals with combined turnover over £50,000 from self-
employment, UK rental, and/or foreign rental income. - April 2027: Turnover over £30,000
- April 2028: Turnover over £20,000
The turnover reported on your 2023/2024 tax return will determine whether you fall into the first wave. HMRC will be issuing letters to those affected from late April 2025.
What does this mean?
Affected taxpayers will be required to:
- Keep digital financial records
- Submit updates to HMRC every quarter via MTD-compliant software
- Complete an end-of-year final declaration (replacing your current Self-Assessment return)
This is a major shift in how tax information is managed and submitted — and it will require action.
How Exchange Accountants is preparing for this change:
We’re actively working to support our clients through this transition. Our team is
currently segmenting all affected clients based on income/ turnover types, software usage,
and VAT status. This will allow us to provide tailored support and communications
specific to your needs.
We are also:
- Reviewing software options for each client
- Creating web resources to walk you through the process
- Developing onboarding sessions and checklists
- Preparing client-specific guidance ahead of HMRC’s April letter drop
Next Steps for You
While we prepare full guidance, here are three actions you can take now:
- Ensure you have a separate business bank account – if you currently use one account for both personal and business transactions, now is the time to separate them.
- Ensure you have online banking for your business bank account– this will be essential for linking your business bank account to MTD compliant software.
- Don’t panic – MTD doesn’t begin until April 2026, and we’ll be with you every step of the way.
- Watch this space – Detailed guidance will be provided soon
This is a temporary holding page to provide you with initial guidance. A full MTD Resource Hub, including detailed web pages and email communications tailored to your needs, is currently being built and will be available shortly.
If you are unsure whether MTD affects you, or want to prepare early, please keep an eye on your inbox or our website for more updates.
Let’s grow together through this change.
The Exchange Accountants Team
