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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 information and the solutions you need to meet MTD legislation.

What is Making Tax Digital?

Making Tax Digital (MTD) is HMRC’s plan to digitise the tax system for VAT, Income Tax Self Assessment and Corporation Tax for businesses. MTD aims 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 summary income and expense data quarterly
  • Finalise your business income at the end of the tax year

How does MTD change Income Tax Self Assessment?

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 ITSA 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, payable 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.

When do I need to be compliant with MTD?

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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MTD for Income Tax

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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MTD for Income Tax

MTD for Income Tax Self Assessment will apply if you have an annual self-employment or property income of more than £30,000.
TBC
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MTD for Income Tax partnerships

General partnerships will need to comply with MTD for Income Tax in the future.
TBC
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MTD for Corporation Tax

Limited companies will need to comply with MTD for Corporation Tax in the future.

What does MTD for Income Tax mean for me?

Start preparing and managing your income and expenses digitally with confidence today. Whether you're an accountant or small business, your Sage solution will have everything you need to be MTD compliant.

As an accountant or bookkeeper

MTD for Income Tax legislation will require accountants and their clients to use MTD compatible software to keep digital records and submit summary income and expense data quarterly.

Sage for Accountants enables practices to manage and serve all their clients with:

  • Access to comprehensive client management for all types of clients.
  • Tools to suit the needs of every type of client, including digital record-keeping, bookkeeping, data automation, and free personal tax solutions.
  • Sage solutions that will have everything you need to be MTD compliant.
  • Complimentary expert MTD guidance so you and your clients can feel confident your needs are being taken care of.

As a small business, sole trader, or landlord

From 6 April 2026 many small businesses, sole traders, and landlords need to begin using MTD compatible software to keep digital records and submit summary income and expense data quarterly.

Sage Accounting is an HMRC-recognised, MTD-ready software which provides functionality for MTD requirements as they come into effect allowing you to remain compliant. You can use it to:

  • Keep digital records and have all your key information in one place
  • Make it simple to prepare and submit your MTD quarterly updates and your Final Declaration when the time comes

MTD for ITSA news, advice, and more

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

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

April 2027: MTD for Income Tax Self Assessment will apply if you have an annual self-employment and/or property income of more than £30,000.

There are also a number of future updates on the HMRC to be confirmed for MTD for Income Tax Self Assessment:

Sole traders and landlords with income under £30,000
MTD for ITSA General partnerships
Limited Companies for Corporation Tax


With MTD compatible software you can:

  • Submit quarterly income and expenses for Self Assessment 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.

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