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Making Tax Digital, simple with Sage

Whether you're an accountant, bookkeeper, small business owner, landlord or sole trader, get all of the tools and information you need to meet MTD legislation.

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What is Making Tax Digital?

Making Tax Digital (MTD) is the HMRC plan to digitise the tax system for VAT, Income Tax Self Assessment, and Corporation Tax for both businesses and individuals. Its purpose is to make tax returns simpler and more efficient for everyone.

What is MTD for Income Tax?

MTD for Income Tax is the next step in the MTD timeline from HMRC. From April 2026 if you have an income of over £50,000 annually, from self employment or property rental, you'll need to use MTD compatible software to:

  • Keep digital records.
  • Submit income and expense summaries quarterly to HMRC.
  • Finalise your end-of-year Tax Return using compliant software.

How does MTD change Income Tax?

The 3 key changes MTD for Income Tax will make to your financial management.

Digital record keeping

You'll need to use MTD compatible software to keep digital records of your income and expenses. 

Quarterly submissions

You'll need to submit quarterly summary data to HMRC. You'll need to submit the summaries electronically with the help of compliant software.

Submit a tax return

At the end of the year, make any final adjustments to your business income and expenses, report all income sources, and make a final declaration to confirm the information is complete and accurate. HMRC will then confirm the tax you owe, to be paid by 31 January the following tax year.

How will MTD for Income Tax help me?

Here are some ways MTD for Income Tax will make your financial admin easier so you can get back to focusing on your business.
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Save time and simplify

Digital software keeps financial admin all in one place, helps automate repetitive tasks, and provides an overview of challenges and opportunities.

Improve accuracy

It's easier to manage business admin with automated processes, digital records, and an almost instant view of your finances.

Improves data safety

Through two factor authentication (2FA), data encryption, and more, you can rest assured your information is safe and stored securely.
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Easier collaboration for accountants and clients

Collaborate with your accountant or clients with ease, through software that allows you to share information instantly.

HMRC deadlines you don't want to miss

April 2022
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MTD for VAT

Now applies to all VAT-registered businesses.

Small businesses, landlord, or sole trader still looking for an MTD for VAT solution?

April 2026
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Income Tax over £50k

MTD for Income Tax will apply if you have an annual self-employment or property income of more than £50,000.

April 2027
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Income Tax over £30k

MTD for Income Tax will apply if you have an annual self-employment or property income of more than £30,000.
April 2028
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Income Tax over £20k

MTD for Income Tax will apply if you have an annual self-employment or property income of more than £20,000.

What does MTD for Income Tax mean for me?

Start preparing and managing your income and expenses digitally with confidence today. Select your business type to see how Sage can help you stay MTD compliant.

As a sole trader or landlord

Many sole traders and landlords need to begin using MTD-compliant software by April 2026. You will need to store digital records and submit quarterly updates.

  • Sage Accounting Individual is an HMRC-recognised MTD-ready software for non-VAT registered sole traders. This complies with each piece of new MTD legislation as it is introduced.
  • Securely store personal digital records and keep key information in one place.
  • Submit your MTD quarterly updates with ease as the deadline approaches.
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As a small business

Many small business will be required to use MTD-compliant software by 6 April 2026. You will be required to record and store digital records, as well as submit summaries of income and expense data quarterly.

  • Sage Accounting is HMRC-recognised, MTD-ready software which provides compliance for each piece of new MTD legislation as it is introduced.
  • Securely store digital records all in one place.
  • Make it simpler to submit your quarterly tax return, compliantly and in time for deadlines
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As an accountant or bookkeeper

MTD for Income Tax legislation will require accountants and their clients to use MTD compatible software by April 2026. You and your clients will need to keep and maintain accurate digital records and submit summary income and expense data quarterly

  • Sage for Accountants is recognised by HMRC as compliant and compatible for MTD for Income Tax. This helps accountants and their clients to remain compliant when managing accounting and tax subscriptions as new legislation is introduced.
  • Get tools to suit the needs of every type of client including support with digital record-keeping, bookkeeping, data automation, and free personal tax solutions.
  • Access complimentary expert MTD advice so you can feel confident that the needs of you and your clients are met.
MTD for practicesDownload guide

MTD for Income Tax news, advice, and more

Find news and advice to discover more about MTD for Income Tax, what it means for you, and make quarterly tax returns stress-free with Sage advice.

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MTD for Income Tax FAQs

Making Tax Digital is HMRC legislation designed to make it easier for tax payers to get their taxes right. By complying with MTD legislation and adopting compliant software, businesses or their accountants can easily view tax information in one place and complete taxes more efficiently.

The first phase of MTD started in April 2019, mandating that most VAT registered businesses with taxable turnover over £85,000 keep digital tax records. In April 2022 MTD for VAT was extended to all VAT registered businesses, including those below the VAT threshold.

These are the upcoming dates to take note of:

April 2026: MTD for Income Tax Self Assessment mandates unincorporated (sole traders and partnerships) businesses and landlords with gross income above £50,000.

April 2026: The earliest possible date for MTD for Corporation Tax after the government announced it wouldn’t be mandated before then.

April 2027: MTD for Income Tax Self Assessment mandates unincorporated (sole traders and partnerships) businesses and landlords with gross income above £30,000.

April 2028: MTD for Income Tax Self Assessment mandates unincorporated (sole traders and partnerships) businesses and landlords with gross income above £20,000.

With MTD-compliant software you can:

  • Submit quarterly tax returns with ease
  • Reduce the amount of paperwork you have
  • Ensure VAT returns are accurate
  • Easily manage bookkeeping from one place
  • View real-time tax information when you need it
  • Keep track of funds to stay on top of business
  • Get more time back to focus on your business

We’re working closely with HMRC and the UK Government to represent UK businesses and we’ve got over 40 years’ compliance expertise to help accountants, bookkeepers, sole traders, and small business owners meet MTD requirements.