Who has to use Making Tax Digital for Income Tax from April 2026?

Sole traders and landlords with qualifying gross income above £50,000 must comply from 6 April 2026. The threshold lowers to £30,000 in April 2027 and £20,000 in April 2028.

What does MTD for Income Tax require?

You must keep digital records in compatible software, submit quarterly updates to HMRC through that software, and file your year-end return digitally.

Can automation handle MTD quarterly updates?

Automation cannot file on your behalf as your agent unless authorised, but it can keep records continuously reconciled and your quarterly figures ready, removing the manual scramble before each deadline.

Making Tax Digital Is Here: How Automation Keeps You Compliant From April 2026

From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC using compatible software. If your business relies on a shoebox of receipts and a year-end scramble, that model no longer works.

What actually changed

Making Tax Digital (MTD) for Income Tax became mandatory in April 2026 for individuals with business or property income above £50,000. Per GOV.UK, affected taxpayers must now:

Keep digital records of income and expenses in compatible software.
Submit quarterly updates to HMRC through that software.
File the year-end return digitally.

It is gross income that counts. Earn £45,000 from self-employment and £6,000 from rent, and your £51,000 total brings you into scope. The threshold then drops to £30,000 from April 2027 and £20,000 from April 2028, so most small businesses will be captured within two years.

The hidden cost is the quarter, not the software

The real change is rhythm. Four submissions a year instead of one means your books can never be 12 months behind. For a busy sole trader, that is four moments a year to reconcile transactions, categorise expenses, and chase missing paperwork.

Where automation fits

This is a textbook automation problem because the steps are repetitive and rule-based:

Transactions sync automatically from your bank and are categorised against your chart of accounts.
Receipts are captured and matched to payments as they happen, not in a panic each quarter.
An agent flags anything unusual (an uncategorised payment, a duplicate, a VAT mismatch) for a quick human review.
The quarterly figures are assembled and ready well before the deadline.

Done this way, MTD stops being a deadline you dread and becomes a by-product of keeping clean records all year.

Start before the next quarter closes

The worst time to set this up is the week a submission is due. Map your bookkeeping process now, connect your accounting tool, and let the routine reconciliation run in the background.