The Countdown to MTD: 9 Months to Go – Are You Ready?
From April 2026, Making Tax Digital for Income Tax (MTD ITSA) becomes mandatory for thousands of individuals — including landlords and sole traders — with combined turnover over £50,000. While that may seem far off, nine months is not a long time when it comes to updating systems, learning new processes, and becoming fully compliant.
The earlier you start preparing, the more confident and stress-free the transition will be.
This article outlines a practical checklist and tailored guidance to help you get MTD-ready.
MTD Preparation Checklist
1. Understand if (and when) you’re affected
MTD for Income Tax applies from April 2026 if:
You are self-employed or a landlord
Your combined gross turnover from self-employment and/or property income is over £50,000
You file an individual tax return (not as a company or partnership)
Additional groups will be brought in from 2027 and 2028 as the turnover thresholds reduce.
2. Start keeping digital records
To comply, you must use MTD-compliant software to digitally record all business and/or property income and expenses. Paper records or spreadsheets will no longer be sufficient.
3. Separate your business and personal finances
If you haven’t already, setting up a dedicated business bank account is essential for clarity and accurate bookkeeping.
4. Enable online banking
MTD software uses live bank feeds to automatically import transactions. If you’re not set up for online banking, now is the time to arrange this.
5. Speak to your accountant or software provider
Accountants can:
Recommend the right software
Support or manage your quarterly submissions
Help you stay on top of changes and deadlines
Tailored Guidance for Different Groups
Self-Employed (Non-VAT Registered)
If you’re not currently using digital accounting software, you’ll need to:
Start transitioning to a digital system
Get comfortable with logging income and expenses throughout the year
Prepare to file four quarterly updates and one year-end submission
Even if you’re below the £50,000 threshold now, you may be brought into MTD in 2027 or 2028.
Landlords
If you earn rental income from UK property:
This income counts toward your MTD threshold
You may need to report each rental business separately
If you also have self-employed income, you may be required to submit up to 8–10 reports per year
VAT-Registered Businesses Already Using Software
You’re likely already complying with MTD for VAT. However:
Income Tax digital reporting is a separate requirement
Make sure your software provider supports both MTD VAT and MTD ITSA
Understand that the submission process and deadlines are different
Clients of Exchange Accountants
We’ve already contacted affected clients and are offering:
Bespoke advice and support
Help with choosing or switching to the right software (we’re Xero Platinum Partners)
Full-service MTD reporting if you’d rather leave it to us
If you haven’t heard from us but think you may be affected, get in touch and we’ll guide you through the next steps.
Preparing Now Means Less Stress Later
The move to MTD is about more than compliance. It’s about improving financial visibility, reducing errors, and taking control of your reporting year-round.
At Exchange Accountants, we’re helping individuals and businesses use this transition as an opportunity to improve how they manage their finances.
If you’d like advice or support, visit our MTD Hub or speak to one of our team.
