Making Tax Digital for Income Tax – Your Roadmap to April 2026

With just over one year to go before Making Tax Digital for Income Tax (MTD for IT) is mandated for the first cohort of individual taxpayers from 6 April 2026, now is the time to start preparing your practice and your clients!

This article looks at what Making Tax Digital (MTD) for Income Tax (IT) actually is, and how your firm can start to prepare for the changes, including improving digital record keeping.

If you need specific support on the MTD initiative then why not consider a 20:20 Innovation membership? You can explore our expertly-curated resources and our CPD tracking dashboard as part of a no-obligation demo.

What is MTD for IT?

Making Tax Digital for Income Tax (MTD for IT) will affect self-employed individuals and those in receipt of property income. They will need to:

• Keep and retain transaction-level (income and expenses) digital records for each self-employment and/or property business.
• Submit quarterly update reports of their year-to-date transactions for each self-employment and/or property business to HMRC.
• Finalise their end-of-year position by providing details of their other personal income sources, making adjustments, claiming reliefs and submitting their digital tax return to HMRC.

These requirements will be phased in as follows:

• From 6 April 2026 if their qualifying income is more than £50,000 in 2024/25; and
• From 6 April 2027 if their qualifying income is more than £30,000 in 2025/26.

In Autumn Budget 2024 it was announced that MTD for IT will be mandated for those with gross income over £20,000 “before the end of this parliament”, but no timescales for this have yet been announced.

The payment dates for income tax and NICs will not change – payment will be due by 31 January following the end of a tax year, with Payments on Account due on 31 January and 31 July.

Affected taxpayers will be used to submitting just one annual self assessment tax return to HMRC. The switch to quarterly reporting will be a challenge for many and they will need your support. This is why MTD for IT is an important, urgent Practice Management issue.

What can you do to get clients prepared for new income tax self assessment rules?

Firstly, make sure you are booked onto our webinar ‘Making Tax Digital for Income Tax – Roadmap to April 2026’, which goes live at 10.00 am on 2 April 2025. If you can’t make that time, there will be a recording available shortly afterwards. The course will cover the legal requirements of MTD for IT before considering the practice management aspects of the new regime. Our aim is to help you develop your own ‘Roadmap to April 2026’!

Secondly, bear in mind that HMRC have identified taxpayers who are likely to be mandated from 6 April 2026. If you have clients who had combined turnover from self employment and property of over £50,000 in the 2023/24 tax year, there is a good chance that they’ll be mandated from 6 April 2026 unless their turnover falls below £50,000 in 2024/25. HMRC intends to write to these taxpayers, starting in April 2025, so you might want to write to them first (if you haven’t done so already)!

Of course, this means segmenting your self-employed and property clients to identify who to focus your communications on. Once you’ve identified who is likely to be mandated from 6 April 2026, you might then further divide the group into categories based on how much support they’ll be likely to need from you. A trader who currently uses a cloud-based software package is likely to require much less support from you than the trader who brings you a carrier bag full of paperwork in the last week of January!

Once you’ve segmented your clients in this way, you can tailor your message to them. For instance, if the client wants your firm to do everything for them, they’ll just need to be made aware of the need to bring their carrier bag of records to you four times a year instead of once. They probably won’t need to know about the different software options available!

20:20 Innovation resources

Our new Making Tax Digital (MTD) resources area contains resources to help with your client communications. It is available to Platinum members and more resources will be added throughout 2025/26. Our new resources include:

MTD for IT client letter template

A Word template letter for your clients who are likely to be mandated from 6 April 2026. Send the message as a letter, an email, or use the text for your own website or blog post. You can edit the text if you wish to target the letter at particular groups of client.

MTD for IT client infographic

An infographic that sets out the new rules in a graphical format, ideal for ‘visual learners’ and those who don’t like reading! The infographic is designed to be fairly neutral so you can add your firm’s branding. It is now available in our Making Tax Digital (MTD) resources area.