Making Tax Digital for Income Tax
The way you report your income to HMRC is changing. Making Tax Digital (MTD) for Income Tax is the next major step in the government’s plan to modernise the UK tax system.
At Alexander Accountancy, we specialise in helping local sole traders, and landlords navigate these digital shifts without the stress. We don’t just help you stay compliant; we help you use digital tools to gain better control over your finances.
What is MTD for Income Tax?
Where previously self-employed individuals and landlords filed a tax return once a year, under the new MTD for ITSA rules, you will be required to:
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Keep digital records of all business income and expenses.
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Send quarterly updates to HMRC using MTD-compatible software.
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Submit a return at the end of the tax year.
Making Tax Digital: ready?
From 6 April 2026, those mandated by HMRC must use it if their annual turnover from self-employment and property is more than £50,000.
Sole traders, landlords or their agents must use software to create, store and correct digital records of income and expenses, send quarterly updates to HMRC, submit tax returns and pay tax due by 31 January the following year.
In April 2027 sole traders and landlords earning over £30,000 will come under Making Tax Digital, then 12 months later those earning over £20,000 will be mandated.
Choose us for MTD
Switching to digital record-keeping can feel overwhelming if you’ve always used spreadsheets or paper ledgers but we provide hands-on support.
Software Selection & Setup As certified partners with leading MTD-compatible software providers like Xero, QuickBooks, and FreeAgent, we can help choose the right platform and set it up to do the heavy lifting for you.
Quarterly Update Management Forget the January deadline rush. We’ll oversee your quarterly submissions, ensuring your data is accurate and submitted to HMRC on time, every time.
Real-Time Tax Planning Because your records will be updated quarterly, we can provide a real-time view of your tax liability. No more “nasty surprises” when it comes time to pay your bill.
Frequently Asked Questions
Do I still need to file a Self Assessment Tax Return? MTD replaces the need for the traditional annual Self Assessment tax return for your business and property income. However, you will still provide a “Final Declaration” to confirm your figures.
What happens if I don’t comply? HMRC is introducing a points-based penalty system for late submissions and payments. Starting early ensures you have your processes perfected before the deadlines hit.
Can I still use Excel? You can use spreadsheets, but they must be “bridged” to HMRC via specific software. We generally recommend moving to a dedicated cloud accounting platform for better efficiency and security.
Get MTD Ready
Don’t wait until it’s too late to be compliant with Making Tax Digital for Income Tax.
Our team is currently helping clients across Burton upon Trent, Staffordshire, Derby, Derbyshire and UK-wide, move to digital and simplify their bookkeeping.
