Making Tax Digital was first announced in 2015 as part of the Budget, and it is steadily becoming a reality for individuals and businesses. For those unfamiliar, Making Tax Digital is a government initiative designed to transform the way tax is reported and paid by moving to a fully digital system. From April 2026, it will apply to self-employed individuals and landlords with income over £50,000, requiring them to maintain digital records and submit updates online to HMRC.

Wait, I Have To Move Everything Online? When?

While this may all seem a bit daunting, the government has stated that businesses will be able to keep digital tax records at a pace that is right for them. Once Making Tax Digital is introduced, it means that business owners are no longer going to be required to make tax payments via post, paper, and pen – a procedure that results in more than £9 billion being lost per year because of human error.

So, What Does This Mean For My Business?

You need to be prepared for some changes over the coming months, so sitting around twiddling your thumbs isn’t the best idea! From April 2026, self-employed individuals and landlords with income over £50,000 will need to keep digital records and submit updates to HMRC using MTD-compatible software. If you currently use non-MTD-compliant software, spreadsheets, or cashbooks, now is the time to start considering the necessary changes to ensure you’re ready for this transition.

The Full Implementation: 2026

While VAT payers were the first to adopt Making Tax Digital, self-employed individuals and landlords with income over £50,000 will need to comply from April 2026. The system's rollout for Income Tax is designed to follow the successful implementation for VAT. This gives businesses and individuals some time to prepare, so it’s important not to leave planning until the last minute.

Are There Any Exemptions?

You don’t have to meet the Making Tax Digital obligations if you cannot pay your tax online for any valid reason. For instance, if you live in a rural area with poor broadband or you have a disability, you may not be held to the new regulations.