Making tax digital for individuals and landlords

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Making Tax Digital (MTD) is one of HMRC’s flagship transformation projects. The aim of the project is to make it easier for individuals and landlords to report their taxes, reduce the incidence of errors and encourage efficiency within the tax administration system. So how will Making Tax Digital for individuals and landlords impact the way you manage your taxes?

What is Making Tax Digital for Individuals?

Making Tax Digital for individuals is about digitising self-assessment tax returns. This means that self-employed individuals must keep digital (electronic) records of their finances, either on software accounting packages, apps or spreadsheets and must use bridging software to transfer their data to HMRC.

What about Making Tax Digital for landlords?

Making Tax Digital for landlords applies to those who earn income via property rentals. Landlords whose income fits the MTD criteria will also need to use software to send their tax information to HMRC.

When do I have to comply with Making Tax Digital?

The Making Tax Digital deadline was delayed from April 2024 to April 2026. From April 2026, any individual or landlord with gross income (not excluding landlord expenses) above £50,000 must comply with Making Tax Digital rules. From April 2028, the threshold reduces to £30,000. Anyone earning below £30,000 per year is not subject to MTD rules.

What exactly does it mean for me/my business?

From April 2026, you will be required to submit your financial data electronically using software which will automatically send the information to HMRC. Data must be submitted quarterly and the submission dates are as follows:

  1. 6 April to 5 July (due by 7 August)
  2. 6 April to 5 October (due by 7 November)
  3. 6 April to 5 January (due by 7 February)
  4. 6 April to 5 April (due by 7 May)

The due date for submission of the quarterly update will be 7th day of the following month. Each submission effectively supersedes the previous one.

You can elect for the update periods to tie in with a month end if this is more convenient. In this case, the periods become:

  1. 1 April to 30 June (due by 7 August)
  2. 1 April to 30 September (due by 7 November)
  3. 1 April to 31 December (due by 7 February)
  4. 1 April to 31 March (due by 7 May)

At the end of the tax you, you’ll also need to submit a final declaration.

Frequently asked questions about Making Tax Digital

Who is exempt from MTD?

You will not be required to comply with Making Tax Digital (MTD) for income tax in the following circumstances:

    • You do not have a UK National Insurance number (although you will be expected to comply with MTD if you are in scope if you eventually obtain an NI number).
    • You are a foster carer or shared lives carer and your only income is qualifying care income.
    • You are digitally excluded – for example, you have an unreliable broadband connection, disability or your religious beliefs prevents you from using computers, you live in a remote location with poor broadband access, etc.

Do sole traders have to comply with MTD?

Yes, anyone with a gross income above the MTD threshold must comply with MTD unless they have applied for an exemption.

Do I need an accountant for MTD?

Although you do not have to use an accountant, you will need to ensure that you implement the right software to submit your electronic records on a quarterly basis. Most sole traders, limited company directors and landlords will probably find it easier to have an accountant to look after this process for them.

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