Making Tax Digital for Income Tax
Helping Sole Traders & Landlords Get Ready for Digital Tax
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is HMRC’s next step towards a fully digital tax system. From April 2026, if your total self-employment and/or property income is over £50,000, you’ll need to maintain digital records and submit quarterly updates to HMRC using approved software.
Who Does MTD for Income Tax Apply To?
Key Thresholds and Start Dates
- From April 2026 – Applies to sole traders and landlords with a combined gross income over £50,000 from self-employment and/or property.
- From April 2027 – Extends to those earning over £30,000
- From April 2028 – Extends to those earning over £20,000
Sole Traders
If you’re self-employed, you’ll need to:
- Keep digital records of all business income and expenses
- Submit quarterly updates to HMRC
- File an End of Period Statement (EOPS) for each trade
- Complete a Final Declaration, replacing your annual Self-Assessment return
We recommend Xero for its seamless digital bookkeeping, invoicing, and reconciliation tools.
💡 Tip: Keeping a separate business bank account makes MTD compliance much easier.
Landlords
If you earn rental income, your property business will also need to be recorded and reported digitally – separate from any self-employment activity.
We recommend Hammock, the landlord-specific software designed for rent tracking, expense categorisation, and HMRC integration.
For jointly owned properties, each owner must maintain and submit their own MTD records. We’ll help you choose the most efficient setup to save time and reduce duplication.
If You Have Both Sole Trade & Property Income
You’ll need to manage each income stream separately – for example:
- Xero for your business
- Hammock for your rental properties
Each has its own quarterly submissions and EOPS, all consolidated into your Final Declaration.
Our Support for MTD for Income Tax
Ad Valorem offers a fully managed MTD service, including:
- Selection and setup of the right software for your income streams (full list of approved software)
- Training and onboarding support if needed
- Ongoing bookkeeping and digital record maintenance
- Handling of all quarterly submissions, EOPS, and your Final Declaration
- Continuous advice to ensure tax efficiency and compliance
Your level of support can be tailored to your business structure, number of properties, and complexity.
Making Tax Digital
When will MTD ITSA apply to me?
From April 2026 for income over £50,000, and April 2027 for income between £30,000–£50,000.
Do I still need to file a Self-Assessment tax return?
What happens if I don’t comply?
Are there exemptions?
Get Ready for MTD for Income Tax
Don’t wait until the deadline – let’s get your records digitised and ready for MTD today.
SERVICES
Your Ambitions, Our Expertise
Ad Valorem are a family run accountancy practice who are perfectly placed to help you with every financial aspect of your business. We focus on providing businesses and individuals with the best technology available, to ensure clients are operating as efficiently as possible, whilst fully understanding their financial position.
With offices in Milton Keynes and Cambridgeshire, Ad Valorem is one of the region’s leading firms of accountants, auditors, tax specialists, and business advisors. We adopt a proactive approach to both compliance and advisory services, placing people and their experiences at the heart of what we do. By maintaining open communication and meaningful conversations, we ensure we fully understand our clients’ goals and ambitions.
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