# What is Making Tax Digital and does it affect me?

Pick My Accountant (https://pickmyaccountant.co.uk/answers/what-is-making-tax-digital/): What is Making Tax Digital and does it affect me? — Quick answer. Making Tax Digital (MTD) is HMRC's programme requiring digital record-keeping and software-based filing. VAT-registered businesses are already in it. From April 2026, self-employed people and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates for income tax, with the threshold falling to £30,000 in April 2027.

## Key facts

- MTD for VAT: already mandatory for all VAT-registered businesses
- MTD for Income Tax: April 2026 for self-employment/property income over £50,000; April 2027 for over £30,000
- You'll file four quarterly updates plus a final declaration instead of one annual return
- Spreadsheets alone won't cut it — you need MTD-compatible software or bridging tools
- Software costs roughly £10–£20/month; many accountant packages include it

## What actually changes under Making Tax Digital?

Quarterly updates are information, not tax bills. Payment dates stay as they are unless HMRC changes them later. Spreadsheets alone will not comply unless bridging software links them to HMRC.

## Who is caught by MTD, and when?

Measure turnover, not profit. HMRC confirmed it does not intend to introduce MTD for Corporation Tax. If you are under the Income Tax threshold you can join voluntarily; you do not have to.

## How should I prepare for MTD without drama?

Software is about £10–£20 a month when charged separately; many accountant packages include it. Confirm quarterly work is in the letter, not assumed.

## FAQs

**Q: Does MTD mean paying tax quarterly?**
A: No — quarterly updates are information, not payments. Tax payment dates stay as they are (31 January and payments on account), though HMRC continues to consult on future changes.

**Q: What if I'm under the threshold?**
A: You carry on with normal self assessment for now. You can join MTD voluntarily, which some people do to spread the record-keeping burden across the year.

**Q: Will my accountant handle MTD for me?**
A: Yes — most firms offer packages covering software, quarterly submissions, and the final declaration. Expect sole trader packages to sit around £39–£89/month with MTD included; confirm the quarterly work is genuinely in scope.

Updated: 2026-08-13

Source: https://pickmyaccountant.co.uk/answers/what-is-making-tax-digital/