MTD for Income Tax – Think you are ready?

April 2026

Quick Context

MTD for income tax applies to self-employed individuals & landlords with combined income over £50k (based on total income, not profit).

Impacted individuals must:

  • Register for MTD 
  • Keep digital records of income and expenses from 6 April 2026
  • Submit these to HMRC as quarterly updates via approved software (specific deadlines apply)
  • Submit a final declaration for the year

Myth 1: Everyone has to comply with MTD for Income Tax

Reality: Only self-employed individuals & landlords with combined income > £50k are impacted from 6 April 2026. (Thresholds lower over coming years).

👉 If you only operate via a LTD Company, MTD does not apply – unless you have also have property or self-employed income outside your LTD exceeding £50k combined.

Myth 2: If I need to comply, I don’t have to register

Reality: If you are impacted, you must register via your Government Gateway.

👉 This needs to be done by 6 April 2026.

Myth 3: I’ll pay more tax under MTD

Reality: MTD doesn’t change how much tax you pay – or when you pay it.

👉 It simply changes “how” you report it. Tax is still due on current due dates of 31 January (and 31 July if payments on account apply).

Myth 4: VAT compliance means I am already covered.

Reality: MTD for Income Tax is separate from VAT.

👉  Even if you are fully MTD compliant for VAT, you will still need to act if joint self-employed and / or property income is over thresholds.

Myth 5: I’ll have to submit a full tax return every quarter

Reality: Quarterly updates are summaries of income and expenses only – not full returns.

👉A final declaration for the year is still required by 31st January.

Myth 6: Spreadsheets aren’t allowed

Reality: You can still use spreadsheets but…

👉 … They must be digitally linked to MTD-compatible software and combined with consistent digital records throughout the year to stay compliant.

Myth 7: My self-employment & property income is <£50k, so it doesn’t matter for me

Reality: If your combined self-employment & property income is < £50k then yes, no action is needed for now. But thresholds are reducing over time:

👉 £50k – From 6 April 2026 onwards

       £30k – From 6 April 2027 onwards

       £20k – From 6 April 2028 onwards

So more individuals will be brought into MTD over coming years.

Hidden benefits of MTD

While MTD can feel like another compliance hurdle, it could offer some advantages:

  • Better visibility over profitability and tax throughout the year
  • Easier budgeting and forecasting
  • Reduced year-end stress

Let us help you get set up properly

Give us a call or drop us an email to see how we can help. We can:

✅ Make sure your software is MTD-compatible

✅ Get digital records up to date

✅ Submit your first quarterly update on time

 

01883 338 325

info@cadenceaccounting.co.uk