Making Tax Digital (MTD) is HMRC's programme to move the UK tax system online. For self-employed people and landlords, the part that matters is MTD for Income Tax (sometimes called MTD for ITSA). It changes how you keep your records and how often you report to HMRC — not how much tax you pay.
Instead of pulling everything together once a year for a Self Assessment return, you keep your income and expenses in digital records and send HMRC a short update every quarter, then confirm your final figures once a year.
MTD for Income Tax is being introduced in phases, based on your qualifying income — your gross income from self-employment and property (before expenses):
If your income is below these thresholds you aren't mandated yet, but many people choose to get ready early to avoid a last-minute scramble.
Done well, MTD can mean fewer errors, a clearer running picture of your finances, and the year-end admin spread across the year instead of one stressful January. The honest trade-off is that it's more frequent admin, you'll need compatible software, and there's a short learning curve. The good news: with a simple system in place, each quarterly update should take minutes.
Based on official HMRC and gov.uk guidance on Making Tax Digital for Income Tax. This is general information, not tax advice. Always confirm your own position with HMRC or an accountant.
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