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A4.172 Making Tax Digital (MTD) for income tax—overview

For the latest New Development, see ND.1812.

MTD requires businesses to keep records digitally and submit tax return data directly from those records using MTD compatible software.

Under MTD IT, a report of the business's trading or property income, allowable expenditure, and claims for allowances or reliefs against such income must be submitted electronically in relation to each tax year (property businesses) or basis period (trading businesses), and interim reports must be submitted quarterly on fixed dates. MTD for income tax is mandatory from 6 April 2026, for individuals and sole traders, where gross rental income and trading turnover is over £50,000¹. MTD IT is extended to turnover/gross income over £30,000 from April 2027².

At Autumn Budget 2024, the Government announced its intension to extend MTD IT to sole traders and landlords with turnover/gross rental income over £20,000 by the end of the current Parliament³.

For background on the development of MTD proposals, see A4.172A. For details of how MTD