So Making Tax Digital has been lurking in the background for years, always “coming soon” but never quite arriving. Well, now we have actual dates. If you’re running a business as a sole trader or you’re a landlord, this is going to affect you. And unlike previous government tech initiatives, this one isn’t getting delayed again.
What Making Tax Digital (MTD) actually means
Stop thinking about tax as something you deal with once a year. MTD means you’ll be reporting to HMRC quarterly instead of annually. You’ll need to keep digital records and send updates four times a year using compatible software. No more shoebox of receipts, no more last-minute scrambling in January. The idea is that regular reporting means fewer errors and less stress. Whether that works out in practice remains to be seen.
When this actually kicks in
Here are the dates that matter:
April 2026: If you’re self-employed or a landlord earning over £50,000, you’re in the first wave.
April 2027: The threshold drops to £30,000. So if you’re earning between £30k- £50k, you get an extra year.
Under £30,000: Still unclear. The government keeps saying “under review,” which usually means “we haven’t figured this out yet.” If you’re running a limited company, you’re safe for now. This only affects sole traders and landlords initially.
What you’ll actually have to do
Use proper software: Excel doesn’t count. You need MTD-compatible accounting software like Xero, QuickBooks, or FreeAgent.
Submit quarterly updates: Income and expenses every three months, not a full tax return.
Annual reconciliation: You’ll still need to file an end-of-year statement to tie everything together.
Final declaration: Confirm your total tax liability for the year. Think of it as spreading your tax admin across the year instead of cramming it all into January.
Why this is different from previous government tech projects
MTD isn’t asking you to use a new government system. You choose your own accounting software from approved providers. The software companies have been preparing for this for years, so the tools actually exist and work. This isn’t another government IT project built by the lowest bidder. Most modern businesses are already halfway there. If you’re using cloud accounting software, you’re probably closer to compliance than you think.
The reality check
This isn’t just a compliance exercise. It’s actually closer to how most successful businesses already operate. If you’re only looking at your numbers once a year, you’re flying blind for 11 months. Quarterly reporting forces you to stay on top of your finances. The businesses that will struggle are the ones still operating like it’s 1995 – paper receipts, annual accounting, and minimal financial visibility.
What about your accountant?
If you use an accountant, they’re probably already preparing for this. Good accountants have been moving clients toward digital systems for years. But don’t assume your accountant will handle everything. You’ll still need to keep proper records and use compatible software. They can’t magic quarterly reports out of a shoebox of receipts.
The upside nobody talks about
Once you’re set up properly, MTD could actually make your life easier. Quarterly reporting means smaller, more manageable chunks of work instead of one massive annual exercise. You’ll spot problems earlier and have better visibility of your cash flow. And if HMRC already knows your income quarterly, there’s less chance of nasty surprises or lengthy investigations.
