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Are you a sole trader or landlord with an income over £50,000? From April 2026, tax returns are now required to be calculated and submitted digitally using compatible software.
What does MTD for Income Tax involve?
1. Using approved software
MTD requires you to keep records of your business transactions in 'functional, compatible software'. As HMRC do not offer their own online accounting software, our team at Wellway can help advise you on which software would be best for your company. We also offer help with the initial set up and ongoing training for you and your staff.
2. Sending quarterly updates
Each quarter, you'll need to send HMRC a digital summary of the transactions in the software.
3. Submitting your tax return
At the end of each tax year, HMRC will require an end-of-year submission to finalise your tax position.
If you would like ongoing help with bookkeeping, filling in the quarterly returns, or you just want us to handle the end-of-year return, please get in touch. We would be happy to help you!
Are there any exemptions?
Exemptions exist for those who are 'digitally excluded' due to age, disability, religion or location.
What if your income is less than £50,000?
MTD is being given a phased introduction but it is possible to sign up sooner if you wish. MTD will become mandatory for sole traders and landlords as follows:
- 6 April 2026 - those with income above £50,000.
- 6 April 2027 - those with income above £30,000.
- 6 April 2028 - those with income above £20,000.
Does MTD apply to partnerships?
Not yet, however, HMRC have advised that business partnerships will also need to use MTD in the future. The timeline for when this will happen will be set out at a later date.
Ready for a smooth transition to MTD for Income Tax? Let us help make it happen for you. Contact us today to book your initial meeting.
