Making Tax Digital (MTD) is the biggest change to UK tax admin in a generation — and from April 2026 it starts applying to sole traders and landlords, not just VAT-registered businesses. Here's what's changing, who's affected and how to get ready without stress.
What is Making Tax Digital?
MTD is HMRC's programme to move tax fully online. Instead of one annual tax return, affected taxpayers keep digital records and send HMRC quarterly updates from MTD-compatible software like Xero — plus a final declaration at year end.
Who's affected from April 2026?
- From April 2026: sole traders and landlords with combined income over £50,000
- From April 2027: the threshold drops to £30,000
- Already in force: all VAT-registered businesses (MTD for VAT)
What you'll actually have to do
- Keep your records in MTD-compatible software (spreadsheets alone won't cut it)
- Send quarterly income and expense summaries to HMRC
- Submit a final end-of-period statement each year
That's four+ deadlines a year instead of one — which is exactly why getting your bookkeeping running smoothly now matters.
How to get ready (the easy way)
As Xero-certified accountants, we handle the whole transition: setting up your software, digitising your records and managing every quarterly submission so you never miss a deadline. Most clients find MTD actually gives them better visibility of their tax bill — no more January surprises.
Start with our dedicated Making Tax Digital hub, or book a free MTD readiness check.