MAKING TAX DIGITAL FOR INCOME TAX (MTD IT)

Why Choose Sadler Advisory?

Big changes are now underway for the self-employed, sole traders and landlords. HMRC began rolling out Making Tax Digital for Income Tax (MTD IT) on 6 April 2026, with further turnover based bands joining in 2027 and 2028.

At Sadler Advisory, we're already helping clients navigate these changes, both those now within MTD IT and those preparing for their start date in 2027 or 2028. With our expertise and relationships with leading software providers, we can guide you through every step, whether you want full support or just the right advice to get started.

We make sure you understand what's required, when it affects you, and how to stay compliant without unnecessary stress.

WHAT IS MTD FOR INCOME TAX?

Making Tax Digital for Income Tax is also referred to as MTD IT and MTD for Income Tax. It is HMRC's digital reporting system. If you are self-employed, a sole trader or earn income from property, you will need to:

Keep digital business records in MTD-compliant software
Submit quarterly updates of income and expenses to HMRC
Complete an End of Period Statement (EOPS) each year
Submit a final declaration by 31 January (similar to the current Self Assessment)

This means moving away from a single annual return towards more frequent updates, keeping you organised and giving HMRC more accurate, timely data.

WHEN DO YOU NEED TO START?

Your start date depends on your turnover (total sales before expenses). HMRC is introducing MTD IT in stages:

6 April 2026 (now in effect) – turnover above £50,000
6 April 2027 – turnover above £30,000
6 April 2028 – turnover above £20,000

Turnover is your total sales before expenses. For example, if you earn £52,000 in sales and have £15,000 of expenses, your turnover is still £52,000, so you are already required to comply.

If your turnover is above £30,000 or £20,000, your start date is approaching — and the sooner you prepare, the smoother the transition.

When will MTD Income Tax apply to me.jpg

Not sure which category you fall into? We can check for you and plan ahead so there are no surprises.

WHAT WILL YOU NEED TO DO EACH QUARTER?

For each business you run, the process will involve:

Keeping records in MTD IT compliant software – ideally connected to your business bank account
Explaining transactions – categorising income and expenses, attaching receipts or invoices
Submitting quarterly updates – HMRC only sees summary figures, not every transaction
Submitting a final declaration – also due by 31 January, alongside your self assessment for other non-sole trader income (if required).

It may sound like more admin, but with the right systems in place, the process can run smoothly and you might understand your business in better depth.

CHOOSING THE RIGHT SOFTWARE

There are many MTD IT compliant software options, each with different strengths depending on how your business operates.

We work closely with leading providers and can:

Recommend the best software for your business type
Set it up correctly and integrate it with your bank account
Train you to use it effectively
Or, if you prefer, manage it entirely on your behalf

If you’re already using software, you can check if it’s MTD IT ready via the HMRC website and we can help you switch if needed.

NOT YET IN MTD IT? PREPARE NOW

If your start date is 06/04/2027 or 06/04/2028, you still have time to get ready. We recommend:

Opening a dedicated business bank account
Getting into the habit of keeping digital records early
Uploading or scanning receipts and invoices regularly
Checking your turnover band so you know your start date
Talking to us about your setup as soon as possible

Taking these steps now will make the transition far smoother when your date arrives.

ALREADY IN MTD IT BUT NOT STARTED YET? WE CAN HELP YOU CATCH UP

If your turnover is above £50,000, you are already required to keep digital records and submit quarterly updates. If you haven't yet got everything in place, don't panic, we can help you get compliant quickly, set up the right software, and make sure your first quarterly submission is on track.