MTD for Income Tax has been introduced by HM Revenue & Customs (HMRC) and requires eligible self-employed individuals and landlords to keep digital records and submit updates using approved software.
To know in detail about MTD ITSA read this blog Making Tax Digital (MTD) for income tax self-assessment
Step 1: Check That You Need to Register
You must sign up for MTD for Income Tax if your total annual income from self-employment and property combined exceeds:
- £50,000 from 6 April 2026
- £30,000 from 6 April 2027
- £20,000 from 6 April 2028
Your qualifying income is your total turnover before expenses.
Use Our Calculator to Find Out When MTD ITSA Becomes Mandatory for You.
Step 2: Make Sure You Are Not Exempt
Some individuals may qualify for exemption. If you meet the exemption criteria, you will not be required to register for MTD.
Read this blog to know in detail Making Tax Digital (MTD) Exemptions: Who Is Exempt and How to Apply
Step 3: Choose MTD-Compatible Software
Before signing up, you must select software that complies with HMRC’s MTD requirements.
Your software must allow you to:
- Keep digital records
- Submit quarterly updates
- File your final annual declaration
Step 4: Gather the Information You Will Need
When registering, you will need to provide details about:
- Your active sole trader business (or businesses)
- Any property income
You will also need:
- Your business start date (if started within the last two tax years), or
- The date you first received property income
- The tax year you plan to begin MTD
If you are a sole trader, you must also provide:
- Your business name (as shown on invoices)
- Your business address
- The type of work you carry out
If you run multiple businesses or have several rental properties, you must confirm details for each one separately.
Step 5: Register Online
You must sign up using:
- Your Government Gateway User ID and password (the same login used for Self-Assessment)
During registration, you may need to verify your identity by:
- Using a mobile app to scan your face and match it to your passport or driving licence, or
- Answering security questions based on information HMRC already holds (such as passport details, P60 information, payslips, or credit reference data)
Important: Transition Period
Even after registering for MTD, you will still need to submit your Self-Assessment tax return for the previous tax year in the usual way during the transition period.
Penalties
If you are required to join MTD from April 2026:
- HMRC will not give penalty points for late quarterly updates during the first tax year (2026–2027).
However, penalties will still apply for:
- Late submission of your final tax return
- Late payment of tax
For many business owners, this process can feel overwhelming, especially alongside running a business
Let Us Take the Stress Away
At GM Accountants & Tax Consultants, our team of qualified accountants can support and guide you with Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) and other tax matters, at competitive and affordable prices.
If you choose us as your accountant:
- You would not deal with HMRC directly
- You would not need to research software
- You would not manage quarterly submissions
- You would not worry about compliance
We register you for MTD free of charge and manage the entire process from start to finish.
Please feel free to contact us for expert advice. If you are unable to visit our office, we can arrange a call at a time that suits you. For further information, email us at admin@gmtaxconsultants.co.uk or call us on 020 3773 4123.
Disclaimer:
The information provided in this blog is for general informational purposes only and does not constitute professional accounting or tax advice. As individual circumstances may vary, readers are advised to contact us directly for advice tailored to their specific financial or tax situation.
