What is MTD for Income Tax?
A Shift to Digital Tax Reporting
What Is MTD for Income Tax?
The government’s Making Tax Digital (MTD) initiative is transforming how self-employed individuals and landlords manage and report their income to HM Revenue & Customs (HMRC). If you’re a sole trader or have property income, MTD for Income Tax Self Assessment (ITSA) will change the way you do your taxes, moving away from a single annual tax return to a more digital and regular system.
This guide explains about MTD for Income Tax in Bristol and North Somerset. What these changes mean for you, who is affected, when the changes take place, and how Pier View Accounting can help you navigate this new landscape with confidence, especially if you’re based in Clevedon, Bristol, or across North Somerset.
Understanding the MTD for Income Tax Rollout: Who & When?
From April 2026
If your qualifying income is over £50,000 a year, you will need to follow MTD for Income Tax rules.
From April 2027
The income threshold drops, and those with qualifying income over £30,000 a year will need to comply.
From April 2028
The government plans to extend MTD for ITSA to those with qualifying income over £20,000 a year.
Future Considerations
HMRC will keep the situation for businesses and landlords with income below £20,000 under review.
Understanding the MTD for Income Tax Rollout: Who & When?
- Digital Record Keeping: You’ll be required to keep digital records of all your business and/or property income and expenses. This means using MTD-compatible software – traditional paper records or simple spreadsheets alone (without bridging software) will no longer be sufficient.
- MTD-Compatible Software: You must use software that is recognised by HMRC for MTD to keep your records and submit your updates. Popular options include FreeAgent, Xero, and QuickBooks. As Quickbooks Pro Advisors, Pier View Accounting has particular expertise in helping clients get the most from this user-friendly platform.
- Quarterly Updates & Final Reporting: Instead of one annual Self Assessment tax return, you’ll need to send summary updates of your income and expenses to HMRC every quarter using your MTD software. Following the tax year, you will also need to submit:
- An End of Period Statement (EOPS) for each business/property source.
- A Final Declaration for all your income (including any non-MTD income like employment or investment income), which finalises your tax liability.
Simple MTD Support for Sole Traders & Landlords
How Pier View Accounting Can Help You with MTD for Income Tax
Navigating these MTD changes can feel daunting, especially if you’re used to doing your own tax returns. That’s where Pier View Accounting steps in. We offer friendly, straightforward MTD support for sole traders and landlords in Clevedon, Bristol, and North Somerset.
Our goal is to make MTD as simple and stress-free as possible for you.
Understand Your Obligations
We’ll clarify exactly what MTD for ITSA means for your specific situation and when you need to start.
Choose and Set Up Software
As FreeAgent specialists, we can recommend the best MTD-compatible software for your needs, get you set up correctly, and provide training. If you prefer other software, we can support that too.
Transition to Digital Records
We’ll guide you on how to move from paper or spreadsheet records to efficient digital bookkeeping.
Manage Quarterly Updates
We can either train you to manage your quarterly submissions confidently or handle them on your behalf, ensuring accuracy and timeliness.
Prepare EOPS & Final Declaration
We can take care of your end-of-year statements and final tax declaration, ensuring all your income is reported correctly and any allowable expenses are claimed.
Ongoing Support
Provide peace of mind with ongoing advice and support as you adapt to the MTD system.
Ready for "Making Tax Digital (MTD) for Income Tax? It's coming April 26!
Useful Resources for MTD Information
HMRC has published the following useful resources on MTD for Income Tax:
- ‘Find out if you can get an exemption from Making Tax Digital for Income Tax’ provides information about who is automatically exempt
- ‘Find out if and when you need to use Making Tax Digital for Income Tax’ provides information about when you need to use Making Tax Digital for Income Tax.
- ‘Work out your qualifying income for Making Tax Digital for Income Tax’ provides information about what counts as qualifying income from self-employment and property
- ‘Making Tax Digital for Income Tax for individuals: step by step’ can be used to calculate qualifying income
Don’t let Making Tax Digital add unnecessary stress to running your business.
Prepare for MTD with Confidence
Pier View Accounting is here to provide expert, friendly MTD guidance and ongoing support tailored to your needs as a sole trader or landlord.
If you are a business in Clevedon, Bristol, or North Somerset looking for assistance with MTD for Income Tax, contact us today for a no-obligation chat about how we can support your compliance.
