At Finsbury Robinson, we’re committed to helping everyone — not just our clients — stay informed about upcoming changes in tax legislation. One of the biggest changes on the horizon is Making Tax Digital for Income Tax (MTDIT),which will soon affect millions of self-employed individuals and landlords across the UK.
Here’s what you need to know — and how to start preparing today.
What Is MTDIT?
Making Tax Digital for Income Tax (MTDIT) is a government initiative designed to modernise how individuals report income and expenses.Instead of one annual tax return, affected taxpayers will need to submit quarterly digital updates to HMRC, followed by a final annual return. These quarterly submissions are essentially brief summaries of your income and expenses — similar to VAT returns — but no tax payments are due at that stage.
When Does It Start?
MTDIT is being introduced in phases based on your income or turnover:
Phase Income/Turnover Threshold Start Date
1 £50,000 or more April 2026
2 £30,000 – £49,999 April 2027
3 £20,000 – £29,999 April 2028
If your self-employed or rental income is below £20,000, you won’t yet be required to join MTDIT — although this could change in future.
What Will Be Required?
To comply, you’ll need to:
1. Keep quarterly digital records of your business income and expenses.
2. Use HMRC-approved accounting software to submit these quarterly updates.
If you already use bookkeeping software (e.g. for VAT), you may not need major changes — your existing setup could handle MTDIT submissions too.
However, if you currently provide your accountant with annual spreadsheets or paper records, you’ll need to move to a more regular bookkeeping system to meet the new quarterly requirements.
Practical Tips for Getting Ready
• Start digital record-keeping early — even if you’re not yet required to file quarterly.
• Test compatible software such as QuickBooks, Xero, or FreeAgent.
• Consider your business structure: For some self-employed individuals, incorporating as a limited company could simplify compliance and potentially reduce tax.
• Stay informed — rules and thresholds may evolve as the rollout continues.
How We Can Help
Even if you’re not a client, we’re happy to point you in the right direction. We can:
• Help you understand whether MTDIT applies to you and when.
• Offer advice on choosing suitable accounting software.
• Discuss whether forming a limited company might be beneficial.
Our goal is to make this transition as straightforward as possible for everyone.If you’re unsure how Making Tax Digital for Income Tax will affect you, or you’d like practical advice on digital record-keeping, software options, or preparing for quarterly submissions, please get in touch with Finsbury Robinson.As a full-service tax, accountancy, and business advisory firm, our friendly and experienced team is here to help. You can reach us on 0208 858 4303 or via email at info@finsburyrobinson.co.uk
