Making Tax Digital (MTD) might sound like a future problem, but the truth is it’s already here. While it started with VAT, it's now expanding to cover income tax, and it’s set to affect thousands more from April 2026.

In this Business Success Conversation, Lucy and Michael from Carthy Accountants explain what’s changing, who it affects, and what you need to do now.

Who Will Be Affected First?

The first group to be impacted by Making Tax Digital for Income Tax (MTD for ITSA) are:

• Self-employed individuals
• Landlords
• With income over £50,000

This change comes into effect from the 2026/27 tax year.

If that’s you, you’ll need to submit:

• Directly to HMRC
• A quarterly simplified profit & loss
• Using compatible cloud software like Xero, FreeAgent, or QuickBooks

What About Everyone Else?

MTD won’t stop at £50,000. The government has confirmed a phased rollout:

• By 2027/28, the threshold drops to £30,000
• By 2029, it will include anyone earning over £20,000
• Partnerships and other individuals are expected to follow

MTD is here to stay. The sooner you prepare, the smoother the transition.

What Do You Need to Do?

If you’re not already using digital accounting software, now is the time to get set up.
At Carthy Accountants, we help you:

• Choose the right software
• Set up digital record-keeping
• Understand your reporting requirements
• Avoid last-minute stress as the deadline approaches

Get the Business You Want

Making Tax Digital is a big change, but with the right systems in place, it doesn’t need to be a stressful one.

Need help getting ready for MTD and stay compliant and in control?

Get in touch with Carthy Accountants today.
Helping you get the business you want.