Making Tax Digital: are you ready for the change?
From April 2026, HMRC will begin rolling out the next phase of Making Tax Digital (MTD) – a major shift in how businesses and individuals keep and submit their financial records. This will affect anyone earning over £50,000 from a combination of self-employment, UK rental, or foreign rental turnover. The threshold will lower in future years.
If you’re a client of Exchange Accountants – or simply want expert guidance – we’re here to help you prepare.
What is MTD?
MTD is HMRC’s move to digital tax reporting. It means:
- Keeping digital records
- Using MTD-compliant software
- Submitting tax updates quarterly (instead of annually)
The aim? To reduce errors, improve accuracy, and streamline tax for businesses and landlords.
What's happening now?
- HMRC will begin issuing letters from late April 2025 to those affected, based on 2023/24 tax returns.
- If your turnover is over or close to £50,000, you may be included.
- If your turnover is between £45,000 and £50,000, you may still receive a letter — but may not need to comply yet.
Some people will be able to opt out for reasons such as age, disability, or religion — but this process is still being finalised by HMRC.
Find your Segment
To give you the most accurate support, please select the option that best describes your current situation:
Group 1
VAT Registered
MTD-compliant software
Group 2
VAT Registered
MTD-compliant software
I am NOT VAT registered and NOT using MTD-compliant software.
Group 3
VAT Registered
MTD-compliant software
You are already required to follow MTD for VAT, but you may not yet be using the correct digital tools. With MTD expanding to income tax, you’ll need to take additional steps to stay compliant.
Group 4
VAT Registered
MTD-compliant software
Need help understanding MTD?
