Making Tax Digital for Income Tax: What It Means & How to Stay Compliant

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Making Tax Digital for Income Tax: What It Means & How to Stay Compliant

From April 2026, the way many self-employed individuals and landlords report their income to HMRC is changing.

This is part of Making Tax Digital for Income Tax Self Assessment (MTD ITSA) — and if you’re affected, it’s important to understand what’s coming and how to prepare.

At Hawkins & Co Accountants & Bookkeepers Ltd, we’re already supporting clients through this transition — and in this guide, we’ll explain everything you need to know in plain English.

💡 What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) is HMRC’s move towards a fully digital tax system.

Currently, most people:
👉 Keep records however they like
👉 Submit one Self Assessment tax return each year

Under MTD ITSA, this will change.

You’ll need to:

  • Keep digital records of your income and expenses
  • Use MTD-compatible software
  • Submit quarterly updates to HMRC
  • Complete an end-of-period statement (EOPS)
  • Submit a final declaration each year

📅 When does it start?

MTD ITSA is being introduced in phases:

  • From April 2026 – if your income is £50,000 or more (based on your 24/25 tax return)
  • From April 2027 – if your income is between £30,000 and £50,000 (based on your 24/25 tax return)

This is based on your combined income from self-employment and property, not profit.

Who is affected by Making Tax Digital?

You’ll be affected if you:

  • Are self-employed
  • Receive property rental income
  • Have combined income above the thresholds

If you fall into this group, you’ll need to follow the new rules from your start date.

What actually changes?

Here’s what day-to-day life will look like under MTD:

📊 Digital record keeping

All income and expenses must be recorded digitally using compatible software.

📤 Quarterly submissions

Instead of one tax return per year, you’ll submit updates to HMRC every 3 months.

✅ Year-end finalisation

You’ll still need to finalise your position at the end of the tax year through an EOPS and final declaration.

What does this mean for you?

For many people, this is the biggest shift in Self Assessment in years.

It means:

  • More regular reporting
  • Less “once-a-year” admin
  • A need to stay organised throughout the year

For some, that’s a big adjustment — especially if you’re used to sorting everything in January.

How to prepare now

The earlier you start preparing, the easier this will be.

We recommend:
✔️ Moving onto MTD-compatible software
✔️ Keeping your records up to date regularly
✔️ Getting comfortable with digital bookkeeping
✔️ Seeking advice before the rules come in

How Hawkins & Co can help you stay compliant with Making Tax Digital

At Hawkins & Co Accountants & Bookkeepers Ltd, we understand that not everyone wants to deal with software, deadlines, and HMRC requirements.

That’s why we offer flexible support depending on how involved you want to be.

We can help you:

  • Choose the right MTD-compatible software
  • Set up your systems correctly
  • Provide bookkeeping support (monthly or quarterly)
  • Review your records
  • Prepare and submit your quarterly updates to HMRC
  • Keep everything compliant and stress-free

📦 Our Making Tax Digital ITSA support packages

We offer three options depending on the level of support you need:

📘 Package 1 – DIY Option

Best for those who want to stay fully in control.

You would:

  • Source your own MTD-compatible software
  • Complete your own bookkeeping
  • Submit your own quarterly updates

We would:

  • Continue to prepare and submit your annual tax return

🤝 Package 2 – “Meet in the Middle” Option

Best for those who want support and reassurance.

We will:

  • Provide MTD-compatible software

You would:

  • Complete your own bookkeeping

We will:

  • Review your records
  • Prepare and submit your quarterly updates

💷 £21 + VAT per month

🚀 Package 3 – Full Support Option

Best for those who want everything handled for them.

We will:

  • Provide MTD-compatible software
  • Complete your bookkeeping (quarterly)
  • Prepare and submit your quarterly updates

You simply:

  • Send us your paperwork each quarter

💷 £34 + VAT per month

🚀 Final thoughts

Making Tax Digital for Income Tax is a big change — but with the right support, it doesn’t need to be overwhelming.

Getting set up early means:
✔️ No last-minute stress
✔️ No confusion over new rules
✔️ Confidence that everything is being done correctly

👉 Need help getting ready?

If you’re unsure how MTD ITSA will affect you — or want to get everything set up before April 2026 — we’re here to help.

Get in touch with Hawkins & Co Accountants & Bookkeepers Ltd today and we’ll guide you through the next steps.