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Important Updates for UK Users - https://www.gov.uk/government/collections/making-tax-digital-for-income-tax
Making Tax Digital for Income Tax is a new way for sole traders and landlords to report their income and expenses to HMRC.
From 6 April 2026, sole traders and landlords must use it if their annual income from self-employment and property is over £50,000.
You, or your agent if you have one, will need to use software that works with Making Tax Digital for Income Tax to:
- create, store and correct digital records of your self-employment and property income and expenses
- send your quarterly updates to HMRC
- submit your tax return and pay tax due by 31 January the following year
Who needs to sign up
You or your client will need to use Making Tax Digital for Income Tax from 6 April 2026 if all the following apply. You or your client:
- is an individual registered for Self Assessment
- gets income from self-employment or property, or both
- have qualifying income of more than £50,000
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Open Bank Payments what the future holds.
2026 is the year “doing tax later” stops working — here’s why you’ll want Making Tax Digital tools in place now
From 6 April 2026, Making Tax Digital (MTD) for Income Tax becomes mandatory (in phases) for many sole traders and landlords — starting with those whose qualifying income is over £50,000. GOV.UK+2GOV.UK+2
That isn’t just a deadline; it’s a structural shift in how you run your finances: you’ll be expected to keep digital records, send quarterly updates, and submit your income tax information using compatible software. GOV.UK+1
If you’re VAT-registered, you’re already living in the MTD world — all VAT-registered businesses have been required to keep digital records and submit VAT returns via compatible software since April 2022. ICAEW+1
In other words: HMRC has already moved the “default” to digital; in 2026 it expands that reality to far more people.
Here’s the part most people underestimate: MTD isn’t just “a new way to file.” It changes the rhythm of compliance. Quarterly reporting means your records can’t be a once-a-year scramble; they need to be consistently accurate and up to date. GOV.UK+1
That’s exactly why MTD tools matter. They turn tax from an annual stress event into a steady, low-drama workflow: transactions flow in, categories are applied, receipts are captured, and your numbers stay ready. And because 2026 is also the start of HMRC’s “digital by default” rollout for outbound communications (moving more letters to your HMRC account/app), being organised digitally becomes the difference between staying ahead — or missing something important. GOV.UK+1
The missing advantage most businesses will care about in 2026: saving money on payments while keeping the books clean
MTD tools get even more powerful when you pair them with open bank payments (pay-by-bank). Instead of card rails, customers pay directly from their bank account — which can reduce transaction costs by avoiding parts of the card fee stack (like interchange) and can settle faster, improving cash flow.
This matters more in 2026 because UK open banking is scaling quickly (the FCA reports 16m+ users), and new capabilities like commercial Variable Recurring Payments (VRPs) are moving toward real-world rollout —
with the first live UKPI payments expected in Q1 2026. Here at making tax digital we are preparing for the future with you.
For many businesses, that combination is the win: lower payment fees + faster settlement + cleaner reconciliation, because payments arrive with better data and can be matched automatically to invoices and income lines inside your accounting/MTD software.
What “winning” looks like in 2026
If you set up the right MTD-recognised tools, 2026 becomes the year you:
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stop chasing receipts and rebuilding spreadsheets every quarter
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reduce avoidable errors by keeping records in one consistent system GOV.UK+1
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make payment collection and reconciliation less manual (especially if you adopt pay-by-bank where it fits)
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stay ready for HMRC’s increasingly digital way of working GOV.UK+1
Bottom line: in 2026, MTD tools aren’t “nice accounting software.” They’re the operating system for staying compliant — and, if you lean into open bank payments, they can also help you keep more of what you earn.
