Making Tax Digital for Income Tax Self‑Assessment will come into effect from April 2026. If you’re a sole trader or landlord who had income above £50,000 during the 2024–25 tax year, this will include you.
We have broken down exactly what you will need to record in order to remain Making Tax Digital compliant.
What you will need to digitally record
MTD means you’ll need to keep digital records of any income and expenses linked to your self‑employment or rental activity. The exact details you track depend on whether you’re a sole trader or managing a property.
Landlords:
- Rent received
- Lease premiums and reverse premiums
- Property expenses (e.g.: repairs, maintenance, and management costs).
Joint‑letting landlords:
You’ll only record your share of the income and expenses.
Sole traders:
- Money coming in from sales or services, including amounts you receive after any platform fees (e.g., Stripe, eBay, etc.)
- Your business outgoings, such as stock purchases, travel costs, office supplies, or bank charges
All digital records must include the transaction date, the amount, and the category it belongs to in your bookkeeping
Managing multiple income sources
If you earn income from more than one self‑employed business, each trade will need its own set of digital records and its own quarterly MTD submission. Rental income works differently: all UK properties can be grouped together, while overseas properties must be tracked and submitted separately.
What you won’t need to digitally record
Not every type of income or cost must be included in your MTD records. You can leave out:
- PAYE salary, partnership income, and dividends
- Personal or disallowable expenses (such as gym memberships or daily commuting)
- Capital purchases like property or equipment
You’re welcome to add these to your software if you prefer to keep everything in one place, but this is not essential.
Making digital record‑keeping easier
Using HMRC‑approved software is the quickest way to stay compliant with MTD.
Platforms like Xero simplify your record‑keeping by pulling in bank transactions automatically, letting you capture receipts through a mobile app, and cutting down manual entry with smart automation.
How we can support you
We’re here to make your move to MTD as simple and stress‑free as possible.
Our support options include:
Do it alone- we provide the tools and training so you can manage your own digital records.
Do it with me- you keep your records, and we review them each quarter before submission.
Do it for me- prefer a hands‑off approach? We’ll take care of the whole process, from record‑keeping to submissions.
What’s next?
If any part of MTD feels unclear, you don’t have to figure it out by yourself. Whether you want to remain involved or hand everything over to us, we’re here to support you.
If you’d like to chat through what MTD means for you, get in touch.
