Making Tax Digital 2026: What Self-Employed Business Owners Need to Know Now

April 2026 marks one of the biggest changes to the tax system in decades. Self-employed individuals and landlords with over £50,000 in annual turnover will be required to follow the Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) rules.

For many business owners, this feels far away but the earlier you prepare, the easier and cheaper the transition will be.

This guide breaks down everything you need to know right now to stay ahead.

Who MTD ITSA Applies To (From April 2026)

You must follow MTD rules if:

• You are self-employed,

• Your turnover is £50,000 or more from your business activities,

• OR you are a landlord earning £50,000+ from property.

Some key points many business owners don’t realise:

• The £50k threshold applies to gross turnover, not profit.

• If you have multiple income streams, they are combined.

• Once you cross the threshold, you are in the system permanently unless your turnover decreases significantly for multiple tax years.

What MTD Actually Requires

Under MTD ITSA you must:

1. Keep digital records (no more paper books)

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

2. Submit quarterly updates to HMRC

   Four updates per year replacing the traditional once-a-year Self-Assessment.

3. Submit an End of Period Statement (EOPS)

   This finalises your income for the tax year.

4. Submit a Final Declaration

   This replaces the current Self-Assessment tax return.

Why This Matters (and Why You Should Prepare Early)

Switching to digital bookkeeping isn’t something you want to rush.

Early preparation gives you:

• Cleaner records

• A smoother transition

• Lower accountant and bookkeeper fees

• Time to choose the best software

• Time to test systems

• Fewer mistakes

• Better tax planning

Most of all, you avoid the panic that will inevitably come when thousands of businesses suddenly realise they are not ready.

Benefits You’ll Actually Feel

MTD isn’t just compliance, it can genuinely improve your business:

✔ Real-time tax estimates

✔ Fewer errors in your accounts

✔ You always know where you stand financially

✔ Easier to claim expenses correctly

✔ Smoother year-end

✔ Less stress, fewer surprises

When done right, MTD is an opportunity to upgrade your financial system.

Prepare Now!

The 2026 deadline will approach faster than people expect.

Those who prepare now will transition easily. Those who wait will face stress, mistakes, and potentially higher costs.

If you want help preparing, choosing software, or getting your books digital, I’m here to guide you through every step.