MTD
Making Tax Digital for Income Tax: Your April 2026 Checklist
What sole traders and landlords with income over £50,000 need to do before April 2026.
May 2026
From 6 April 2026, Making Tax Digital for Income Tax (MTD for IT) applies to sole traders and landlords whose qualifying income exceeds £50,000. If you have not yet chosen compatible software, reviewed your records workflow, or spoken to your accountant, this guide sets out the practical steps.
Who is affected from April 2026?
HMRC uses your most recent Self Assessment return to identify who falls into scope. If your combined self employment and property income exceeded £50,000 in the 2024 to 2025 tax year, you are likely in the first wave. HMRC will write to eligible taxpayers, but waiting for that letter is not a preparation strategy.
What Making Tax Digital for Income Tax actually changes
You must keep digital records, send four quarterly updates to HMRC each year and submit a final declaration at the close of each tax year. The quarterly updates are new obligations. They do not replace anything currently required by Self Assessment. The final declaration replaces the annual return. Late or missing quarterly updates generate penalty points under the new points based penalty system.
Your April 2026 preparation checklist
Choose and set up MTD compatible software such as Xero, QuickBooks or FreeAgent. Connect your bank feeds to the software. Separate business and personal transactions from the start of the 2026 to 2027 tax year. Agree a quarterly review and submission workflow with your accountant. Check that your bookkeeping produces categorised data throughout the year, rather than being reconstructed in January.
What happens if you miss a quarterly update?
HMRC introduced a points based penalty system alongside MTD. Each missed quarterly update adds one point. Quarterly filers receive a £200 penalty once they reach four points. Further missed submissions add further penalties. Points reset after a period of sustained compliance, but it is better not to accumulate them in the first place.
How Crestfield Advisory can help
Crestfield Advisory can review your current records, recommend compatible software, set up your first quarterly workflow and handle submissions alongside your annual tax position. If you are in scope from April 2026, preparation should start well before the deadline.
Ready to make the first step?
Book an introductory meeting using the sample contact details.