The short version: If your gross takings from self-employment or rental property passed £30,000 in 2025/26, Making Tax Digital for Income Tax reaches you on 6 April 2027. From that date you keep HMRC digital records in approved MTD software, report four times a year, and close the year with a final online declaration. Around 1.08 million extra people are expected to be affected, and the sensible move is to prepare during the winter months.
Most people do their tax like they do a loft clear-out: once a year, in a hurry, with regret. The MTD £30,000 threshold ends that habit. Instead of one giant annual job, you will handle small, regular ones. As an established London accountancy firm, we have built this playbook so you can arrive in April calm, organised and penalty-free.
Step 1: Score Yourself on the Threshold
Answer these five questions honestly. Each “yes” brings you closer to the new rules.
- Did you invoice, trade or collect rent as an individual (not through a company) in 2025/26?
- Did total money received from all of that activity exceed £30,000, before costs?
- Do you own rental property in your own name, or a share of one?
- Do you run more than one small income stream that adds up?
- Did you file a Self Assessment return in the last two years?
Two or more “yes” answers mean you should check your figures carefully. The test uses turnover, not profit. Here is why that matters:
- A market trader takes £38,000 in sales and spends £22,000 on stock. Profit is £16,000, but turnover is £38,000. She is in.
- A couple who let a flat jointly should look at each person’s own share of the rent, because each individual is assessed separately. Confirm the treatment of joint income with your accountant.
- A tutor earning £17,000 teaching plus £14,000 from a spare room tops £30,000 across both sources.
- A one-person limited company is outside these individual rules, although other digital duties apply.
Landlords with several lets can read our pages on property tax accountants and the property tax specialist. Online freelancers will find relevant help on our web developers page.
Step 2: Understand What Is Really Changing
The old model was simple: gather a year of paperwork, file once. The new model has three moving parts.
Digital records. Every sale, rent payment and business expense goes into software as it happens. Paper diaries, photos of receipts stored on a phone and unlinked spreadsheets stop being enough on their own.
Four progress reports. Your software sends HMRC a snapshot of income and costs each quarter. Think of MTD quarterly updates as a progress report, not a second tax return. You are not working out your final bill each time.
One final declaration. After the tax year ends you add anything outside your business income, claim reliefs and confirm the year. It replaces the old Self Assessment return for those in the scheme.
The workload is similar in total, but it is spread thinly across twelve months. Our bookkeepers in London can handle the recording, and our Self Assessment tax return accountants look after the final declaration.
Step 3: Learn the Calendar
| When | What you need to do |
| Now to 5 April 2027 | Register, pick software, rehearse |
| 6 April 2027 | Your first digital quarter begins |
| 7 August | Report for April to early July |
| 7 November | Report for July to early October |
| 7 February | Report for October to early January |
| 7 May | Report for January to early April |
| 31 January (following year) | Final declaration and tax payment |
Those already in the scheme (the £50,000+ group) file their next quarterly report on 7 November 2026. Watching how that goes gives newcomers a useful preview. The threshold then drops to £20,000 in April 2028, so this is a habit you will likely need whatever your current income.
Step 4: Build a Simple Quarterly Routine
Good systems beat good intentions. Here is a routine that takes about an hour a month once it is set up:
- Weekly (10 minutes): match bank transactions to categories and photograph any receipts.
- Monthly (30 minutes): check unpaid invoices, chase late rent and review the month’s profit.
- Quarterly (20 minutes): review the summary your software generates, query anything odd, then approve and send it.
- Annually: meet your accountant to finalise the year and plan ahead.
If that sounds like too much, hand the weekly and monthly parts to a bookkeeper and keep only the quarterly review.
Step 5: Pick Software Without Regret
Your MTD software is a long-term working partner. Judge it on these points:
- It must appear on HMRC’s list of recognised products.
- Its features must match your income. Property owners need per-property reporting, and freelancers need invoicing and mileage.
- A live bank feed saves hours and reduces typing errors.
- The screen layout should make sense to you within ten minutes of logging in.
- Support should be easy to reach when a quarter deadline is close.
Already attached to a spreadsheet? Bridging software can connect it to HMRC, as long as the link is digital from start to finish. A spreadsheet emailed or typed in manually does not qualify.
Step 6: Protect Your Cash Flow
One benefit of quarterly reporting is that you see your tax position building up gradually. Use it:
- Open a tax savings pot and move a fixed percentage of every payment into it.
- Compare each quarter’s profit with the same quarter last year.
- Spot slow-paying customers or empty rental months early.
- Avoid the shock of a large January bill by knowing roughly what is due.
Our tips to save tax and tax advisory services can help you find legitimate savings while you tidy up your records.
Penalties and Protection
HMRC applies a points system. A missed deadline earns a point, and at the limit a £200 penalty applies. Late tax payments carry their own charges. The £50,000+ group received a grace year for late quarterly reports, but several advisers expect no such grace for the April 2027 group. Check GOV.UK for the current position and treat every date as firm. Should HMRC ever question your figures, our HMRC tax enquiry support can step in.
Some people are exempt, for example if age, disability or location makes digital tools unreasonable to use. Exemptions are not automatic, so apply through GOV.UK if you think you qualify.
Your Six-Month Countdown
- November: total your 2025/26 income and run the scorecard above.
- December: register on GOV.UK, or ask an agent to register you, and shortlist two software options.
- January: file your 2025/26 return by 31 January and connect your bank feed.
- February: test the system with real transactions.
- March: separate business and personal accounts and fix any gaps.
- April: start your first digital quarter with confidence.
Why Choose Our MTD Accountants in London
Brayan & Spencer Associates is an ACCA-registered firm. As MTD accountants in London, we will:
- Confirm whether the rules apply to you and register you
- Choose and configure software to suit your income
- Prepare and send your quarterly updates and final declaration
Explore our full taxation services, our accounting and tax solutions, read about us, or browse the BS Associates blog.
Limited Offer: A Year of MTD Software, Free
Join as a new client and receive 12 months of MTD-ready accounting software at no extra cost, installed and supported by our team from day one.
👉 Book your free consultation and claim your free MTD software 📞 Call 0207 183 5956 | ✉️ info@bsassociate.co.uk
Frequently Asked Questions
On 6 April 2027. The limit falls to £20,000 in April 2028.
Turnover: gross receipts before costs and allowances.
It can. If your gross rental income, alone or added to other self-employed income, passes £30,000, you are included.
Brief reports of income and costs sent through approved software. They are not extra tax returns.
Yes. You need a Self Assessment registration and a return filed in the last two years. Agents can register clients too.
Only if bridging software links it digitally to HMRC. A stand-alone spreadsheet is not enough.
