Making Tax Digital for Income Tax:
What UK Taxpayers Need to Know
The UK tax system is continuing its move towards digital reporting through Making Tax
Digital (MTD). From April 2026, new requirements will apply to how certain UK taxpayers
report self-employment and property income to HM Revenue & Customs (HMRC).
Understanding whether these requirements apply to you, and what will be involved, is
important to ensure compliance and avoid penalties.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax requires self-employed individuals and landlords to report
their income and expenses using compatible digital software rather than relying solely on an
annual tax return.
Taxpayers within scope, or their appointed agent, must keep digital records, submit quarterly
updates during the tax year, and complete a final end-of-year declaration. While the
reporting process changes, the obligation to calculate and pay tax remains the same, with
any tax due payable by 31 January following the end of the tax year.
Who does Making Tax Digital for Income Tax apply to?
As of April 2026, MTD applies to:
● Self-employed individuals and sole traders
● Landlords earning rental income from property
● Partnerships, including limited liability partnerships (LLPs), where partners earn
income subject to income tax
It will apply from 6 April 2026 where qualifying income from self-employment and or property
exceeds £50,000. Individuals with qualifying income above £30,000 will be brought into the
system from April 2027.
Exemptions from MTD for Income Tax
Some individuals and businesses may be exempt from MTD for Income Tax, such as:
● Those with low income, where income from self-employment or property is below
£10,000
● Digital exemptions, where you cannot use digital tools because of disability, age, or
geographic location
● Religious objections, where religious beliefs prevent the use of digital technologies
Software and Digital Record Keeping
HMRC does not provide software for Making Tax Digital. Taxpayers must choose accounting
software that is compatible with the MTD system.
Many existing accounting platforms already meet these requirements. However, taxpayers
who currently rely on spreadsheets or manual records may need to review how their
accounts are managed ahead of April 2026.
Making Tax Digital does not change the type of records that must be kept, but it does change
how those records are created, stored, and submitted
Consequences of Non-Compliance
Failure to comply with requirements could result in penalties or interest charges.
These could include:
● Late submission penalties for not sending quarterly updates or the final end-of-year
declaration on time
● Late payment penalties for not paying your tax bill on time
● Errors and inaccuracies in your records which could lead to further penalties
HMRC will also send out reminders and warnings to help guide taxpayers through the
transition. However, it remains important to take the necessary steps to avoid penalties
Planning Ahead
Although Making Tax Digital for Income Tax will not apply until April 2026, taxpayers who
may be affected are encouraged to begin preparing in advance. This includes reviewing
income levels, understanding reporting obligations, and ensuring suitable software is in
place.
This is particularly relevant for Irish residents with UK self-employment or rental income,
where UK compliance obligations may need to be managed alongside Irish tax
requirements.
Contact ECOVIS Ireland
If you are unsure whether Making Tax Digital for Income Tax applies to you, or would like
assistance preparing for the new requirements, please contact the ECOVIS Ireland team.
+353 1 8230000 
info@ecovis.ie 
www.ecovisireland.com
