Making Tax Digital (MTD) is no longer a future consideration for businesses and landlords across the UK, it is a reality. The first phase of MTD for Income Tax self-assessment came into force from April 2026, and many individuals and businesses are now implementing the changes in how they record, report, and manage their taxes.
While the headlines around MTD can seem daunting, the reality is far more manageable than many expected. The key is understanding what has changed, what is changing, who it applies to, and why preparing early will make the transition far smoother.
MTD is not as complicated as many fear
One of the biggest misconceptions surrounding Making Tax Digital is that it will create an overwhelming amount of administration. In reality, while there is an adjustment period, businesses that embrace digital processes early often find the system brings more efficiency and additional benefits.
The April 2026 rollout applied to individuals with combined self-employment or rental income above £50,000 in the 2024/25 tax year, based on turnover rather than profit. This distinction is important, as many business owners mistakenly assume the threshold relates to taxable profit rather than gross income.
From April 2027, the threshold will reduce to a combined turnover above £30,000 in the 2025/26 tax year, bringing significantly more individuals into the regime.
Here is a list of all the upcoming dates to be aware of
MTD for income tax timeline
Keeping a note of these dates is important so you’re ready to start using MTD for income tax in time.
| Date | Event |
| 6 April 2026 | When you must start keeping records using MTD for income tax software if your income was over 50k in 2024/25 tax year |
| 7 August 2026 | Deadline to send your first quarterly update |
| 7 November 2026 | Deadline to send your second quarterly update |
| 31 January 2027 | Deadline to submit a self-assessment tax return the usual way for 2025 to 2026 |
| 7 February 2027 | Deadline to send your third quarterly update |
| 7 May 2027 | Deadline to send your fourth quarterly update |
| 7 August 2027 | Deadline to send your first quarterly update for 2027 to 2028 |
| 7 November 2027 | Deadline to send your second quarterly update |
| 31 January 2028 | Deadline to submit your tax return straight from MTD for income tax software for 2026 to 2027 |
| 7 February 2028 | Deadline to send your third quarterly update |
| 7 May 2028 | Deadline to send your fourth quarterly update |
Under MTD, taxpayers will need to maintain digital records and submit quarterly updates through compatible software instead of relying solely on an annual self-assessment tax return. While this may initially feel like an added burden, regular reporting will improve financial visibility and reduce the stress often associated with year-end tax deadlines.
For many businesses, the transition is also an opportunity to modernise financial processes, gain more accurate reporting, and improve overall efficiency.
Why delaying preparation could create operational challenges
The greatest operational risk with MTD is leaving compliance until the last minute. Businesses that wait until the reporting deadlines approach may find themselves dealing with rushed software implementation, incomplete records, unnecessary pressure on internal teams and missed tax efficiency opportunities.
By contrast, businesses that adopt digital bookkeeping processes now are likely to experience a far smoother transition ahead of the first deadline. Integrating digital systems into day-to-day operations allows time for training, testing software, and establishing routines before quarterly submissions become mandatory. Read our article on MTD software.
The quarterly deadlines themselves will also require more discipline than many are used to. The first quarterly update for those entering MTD in April 2026 will be due by 7 August 2026, with subsequent submissions every three months thereafter.
Alongside quarterly updates, traditional payment deadlines still apply, including January balancing payments and July payments on account.
Businesses that prepare early will not only reduce compliance risk but also avoid the time pressures that can come from attempting to digitise records retrospectively.
Understanding exemptions and preparing for the future
Not every taxpayer will be required to adopt MTD immediately. There are several exemptions available, including for individuals who are digitally excluded, certain trusts and partnerships, and those with qualifying income below £20,000.
HMRC has also introduced temporary transitional exemptions for certain groups until at least April 2027, including some farmers, foster carers, and individuals with trust income declarations.
However, exemptions are not designed to delay action unnecessarily. HMRC has made clear that unfamiliarity with software, concerns over additional time, or a preference for paper returns will not usually qualify as valid reasons for exemption. Click here for the full list of exemptions.
For businesses and individuals falling within the new MTD rules, the best approach is to start preparing now. Reviewing bookkeeping systems, speaking to MTD accountants, and understanding reporting requirements ahead of time can make the transition less stressful.
Making Tax Digital represents one of the biggest shifts in tax administration in recent years, but with the right preparation, it can also be an opportunity to improve financial processes, increase efficiency, implement tax efficiencies, and gain better visibility over business performance.
If you are unsure how Making Tax Digital will affect you or your business, the team at Hayward Wright can help you understand your obligations and review your current processes. Get in touch to discuss how we can support you with MTD and wider tax planning advice.