Making Tax Digital for Income Tax Explained
7th January 2026
We’re explaining Making Tax Digital for Income Tax for sole traders and landlords ahead of its introduction in 2026. You will have seen lots of information online about Making Tax Digital for Income Tax. What does it actually mean, what will you need to do differently and what will stay the same? Read on to find out…
Software
You will need to record your business/property transactions using recognised accounting software that enables Making Tax Digital for Income Tax online submissions, such as Xero. You can find out more about choosing the right accounting software for your business by clicking here.
Quarterly Updates
You will need to let HMRC know your income and expenses from your sole trade or letting business via quarterly online submissions. These updates are a simple summary of income and expenses, made directly from your accounting software. This will enable you to keep track of profits throughout the year, helping you to budget, forecast and plan.
You are only submitting information quarterly. You will not have to pay tax quarterly.
The deadline for paying your tax remains 31st January.
The due date for submission of the quarterly update will be 7th day of the following month. Each submission effectively supersedes the previous one as shown below:
You can choose for the update periods to tie in with a month end if this is more convenient. In this case, the periods become:
In addition, you will still be required to complete and submit your Self Assessment Tax Return to include your income from interest, dividends etc but you have completed throughout the year your sole trade or letting business accounting records in a digital format.
This again enable you to keep track of profits and help with budgeting and planning for your tax bills!
We’re Here To Help
There are many steps that we can take to help you to prepare you for this change, even if you will not be mandated until 2027 or 2028.
Please speak to your Whitings LLP contact or your local Whitings LLP office to find out how you will be affected and the next steps to take in preparation.
Look out for our regular updates on Making Tax Digital for Income Tax explaining the change in the way tax payers will report information to HMRC.
Disclaimer - All information in this post was correct at time of writing.
