MTD for Income Tax: set up and quarterly updates done for you

MTD for Income Tax (Making Tax Digital for Income Tax) is HMRC’s new way of reporting for sole traders and landlords. You keep your income and expense records in compatible software and send a short update to HMRC every quarter. After the year ends, you still file a final declaration by 31 January, just as you file a tax return now.

It does not change how much tax you pay. It changes how often you report, and it means paper records and a once-a-year scramble no longer work. Each quarterly update is a summary of income and expenses. It is not a full tax return, and you can correct figures in later updates or in the final declaration. The real benefit of having us do it is that your records stay up to date all year, so you can see your likely tax bill long before 31 January.

It depends on your qualifying income. That is your gross income from self-employment and property added together, before any expenses. HMRC looks at the tax return from two years earlier.

Say you earn £18,000 from self-employment and £14,000 in rent. Your qualifying income is £32,000, so you join from April 2027 even though neither source is over £30,000 on its own. HMRC writes to people who must join. Some people are exempt, for example if they are digitally excluded. They carry on filing a normal Self Assessment return.

• Sole traders with turnover over the joining limit for their year
• Landlords whose gross rent alone, or added to a trade, takes them over the limit
• People with both a business and rental property, who need separate records for each
• Anyone already in who is finding the quarterly routine harder than expected

Even if you do not have to join until 2027 or 2028, it pays to get ready early. Moving from paper or a once-a-year spreadsheet to digital records takes a little time to settle. Starting a year ahead means the first real quarterly update is just a check, not a rush. If HMRC has written to you, send us the letter and we will confirm what it means for you.

You can choose calendar quarters instead (ending 30 June, 30 September, 31 December and 31 March). The deadlines stay the same.

1. 1

   Check your start date

   In a free chat we add up your qualifying income and confirm when you need to join, or whether you are exempt.

2. 2

   Choose the software

   We pick software from our supported list that suits your records, and connect your bank where it helps.

3. 3

   Sign you up

   We handle sign-up with HMRC as your agent and set up your quarters.

4. 4

   Each quarter

   We review your records, fix anything missing, show you the figures and send the update before the deadline.

5. 5

   Year end

   We make the adjustments, claim allowances and file your final declaration by 31 January.

Landlords have a few extra points to watch, such as jointly owned property. Our guide to MTD for landlords covers them, and our main MTD for Income Tax guide explains the rules in full.

Quarterly updates and the final declaration are covered by your fixed monthly fee, from £99 a month for self-employed people and landlords. Spreading the work across the year is what makes a fixed monthly fee fair. See our fees page.

• Your last two Self Assessment returns, so we can check your qualifying income
• Any letter you have had from HMRC about Making Tax Digital
• Bank statements or software access for each business and each property
• Receipts and invoices, as photos or on paper