What’s Next for Making Tax Digital for Income Tax?
The government’s long-running Making Tax Digital (MTD) programme is set to take another significant step forward.
From April 2026, self-employed individuals and landlords with income over £50,000 will be required to keep digital records and submit quarterly updates via MTD for Income Tax Self Assessment (MTD for ITSA).
In April 2027, this threshold will drop to £30,000. And now, MTD is expected to be expanded again from April 2028, following HMRC’s most recent announcement.
So, what does this expansion mean for taxpayers, and what should businesses and individuals be doing to prepare?
Here at Ward Goodman, we’re keeping a close eye on these developments, especially with the MTD Live event just around the corner. In this article, we’ll cover what’s happening, who’s affected, and what to expect next.
What Is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is HMRC’s plan to replace traditional Self Assessment with a fully digital tax system.
Instead of submitting one annual tax return, affected individuals will need to:
- Keep digital records of income and expenses
- Submit quarterly updates to HMRC
- Finalise their tax position with an end-of-year declaration
This new system is intended to reduce tax errors, improve efficiency, and streamline the tax process for self-employed people and landlords.
Who Is Affected and When?
From April 2026, all self employed individuals & landlords with qualifying income over £50,000 will need to comply. This threshold will drop to £30,000 in 2027 and then to £20,000 in 2028 according to the latest announcement.
Individuals with income under £20,000 as well as partnerships and limited companies are not included in the current timetable for MTD, but we expect that the scope will be expanded in the future.
What is Qualifying Income?
Qualifying income includes all combined income from trading and property before taking into account any expenses.
Whether an individual exceeds the threshold will be based on the annual total revenue recorded in their Self Assessment tax return from the previous tax year. For example, whether an individual will qualify from April 2026 will be tested based on the combined self-employment income and property income on their 24/25 Self Assessment tax return.
Why MTD Matters
These changes are far more than just red tape. They will have major implications for:
- Record-keeping and software: Manual spreadsheets will not suffice on their own – MTD will require compliant digital records and quarterly submissions through compatible software as it will not be possible for individuals to submit manually through HMRC.
Tax planning: More frequent reporting will require regular contact with our clients to review the figures, which will give us an opportunity to provide more proactive tax advice.
What We’re Watching For at MTD Live
With the MTD Live event taking place in just a few weeks, our team at Ward Goodman, Anthony Boni and Jess Edroff will be attending to hear directly from HMRC and other industry experts.
We’re particularly interested in:
- Clarity around expansion plans
- Insights into exemptions and practical guidance
- Details about how agents and software providers will support clients
Anthony had the following to say ahead of the event:
“We understand the significance of these changes for our clients, which is why we’re committed to proactively supporting them ahead of the deadlines for compliance and staying up to date with the latest developments.
Our goal is to work closely with our clients to ensure a smooth transition and full adherence to the new requirements. If you have any specific questions you’d like us to raise at MTD Live, please don’t hesitate to let us know—we’ll make sure to get the answers you need!”
How to Prepare for MTD for Income Tax
Whether you’re self-employed or a landlord, now is the time to:
Check if you’ll be affected
Look at your total income from self-employment and property. If you’re nearing the threshold, consider how it might change over the next year.
Review your record-keeping
Consider whether your current record keeping is compliant for MTD and what action to take if it isn’t.
Talk to Us
Getting the right advice early can help you transition smoothly and avoid penalties.
The Path to MTD is Still Unfolding
MTD for Income Tax will soon be here.
While April 2026 is the first milestone, the 2028 expansion means more individuals and businesses will need to adapt.
We’ll continue to update our clients as more details emerge. With our experience supporting businesses across Dorset and beyond, we’re here to help you stay compliant and confident, whatever HMRC rolls out next.
Need help preparing for Making Tax Digital?
Get in touch with Ward Goodman to speak with our expert advisers today. If you have questions we suggest getting in touch before our visit to MTD Live, where we can ask questions on your behalf!
