MAKING TAX DIGITAL FOR INCOME TAX

Making Tax Digital, Made Simple.

Get ready for Making Tax Digital for Income Tax with practical, straightforward support from Vanguard Accountants. We help sole traders, taxi drivers, landlords and other self-employed individuals keep their records organised and meet their HMRC reporting obligations.

MTD

Ready for the change?

  • ✓ Digital record keeping
  • ✓ Quarterly updates to HMRC
  • ✓ Year-end tax return support
  • ✓ Software setup guidance
  • ✓ Ongoing accounting support
UNDERSTANDING MTD

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is HMRC's digital system for reporting income and expenses for certain sole traders and landlords. Instead of relying solely on an annual Self Assessment return, business and property records are kept digitally and information is submitted to HMRC during the year.

The rules are being introduced in stages. Whether you need to use MTD, and when, depends on your qualifying income and circumstances.

Important:

Qualifying income is based on your total income from self-employment and property before expenses. The MTD thresholds are being introduced in stages from April 2026 onwards.
WHO IT AFFECTS

Who May Need to Use MTD?

MTD for Income Tax applies to certain individuals with income from self-employment, property or both.

01

Sole Traders

If you are self-employed and your qualifying income is above the relevant threshold, you may need to use MTD for Income Tax.

02

Landlords

Individuals with qualifying property income may also fall within the MTD for Income Tax rules.

03

Self-Employed Professionals

From taxi drivers and tradespeople to consultants and other self-employed professionals, MTD may affect how you report income.

MTD THRESHOLDS

When Does MTD Apply?

The introduction of MTD for Income Tax is being phased in according to qualifying income.

Tax year used to determine eligibility Qualifying income MTD starts
2024–25 More than £50,000 6 April 2026
2025–26 More than £30,000 6 April 2027
2026–27 More than £20,000 6 April 2028

Thresholds and eligibility rules can depend on your circumstances. Vanguard Accountants can help you understand what the rules mean for your business.

THE ROAD AHEAD

MTD Introduction Timeline

Planning ahead can make the transition much easier.

6 April 2026

MTD for Income Tax starts for individuals whose qualifying income was more than £50,000 for the 2024–25 tax year, subject to the relevant rules and exemptions.

6 April 2027

The next stage applies to individuals whose qualifying income was more than £30,000 for the 2025–26 tax year.

6 April 2028

The threshold is scheduled to reduce further, with MTD applying to qualifying income above £20,000 for the relevant 2026–27 tax year.

VANGUARD SUPPORT

How We Can Help With MTD

From getting organised to ongoing reporting, our accounting support can help you prepare for the transition to digital tax reporting.

01

MTD Readiness Review

We review your circumstances and help you understand whether MTD for Income Tax may apply to you and when.

02

Digital Record Keeping

We help you understand what financial records you need to maintain and how to keep your business information organised digitally.

03

Software Guidance

We can help you understand the role of compatible accounting software in your MTD process.

04

Quarterly Updates

We can support you with the information and accounting processes needed for quarterly reporting.

05

Year-End Tax Return

We can help prepare the relevant year-end information and Self Assessment requirements.

06

Ongoing Accountant Support

Instead of dealing with your accounts alone, you can have ongoing support from Vanguard Accountants.

Taxi Driver Accounting & MTD Support

If you're a taxi driver or private hire driver, keeping track of your income, mileage and business expenses can be time-consuming. We can help you organise your accounts and understand your tax reporting responsibilities.

  • ✓ Self Assessment support
  • ✓ MTD preparation
  • ✓ Income and expense records
  • ✓ Allowable expense guidance
  • ✓ Digital bookkeeping support
  • ✓ Ongoing accounting assistance
Speak to Vanguard Accountants

A simpler way to manage your accounts

Whether you drive full-time, part-time or combine your driving income with other work, we can help you keep your accounting process organised.

Your time is better spent running your business.

GET PREPARED

What Will You Need?

Preparing early can make your transition to digital reporting much easier.

01

Digital Records

Your business and property income and expense records need to be maintained digitally where MTD rules apply.

02

Compatible Software

You need software that works with MTD for Income Tax to maintain records and send the required information to HMRC.

03

Professional Support

An accountant can help you understand the requirements and keep your accounting process organised.

WHY GET READY NOW?

Make the Transition Easier

Getting your records and accounting processes organised early can reduce last-minute pressure.

✓

Stay Organised

Keep your business income and expenses organised throughout the year instead of leaving everything until the deadline.

✓

Understand Your Numbers

Regularly maintained records can give you a clearer picture of your business finances.

✓

Reduce Last-Minute Stress

Preparing your records and software ahead of time can make your reporting process more manageable.

FAQ

Making Tax Digital FAQs

Some of the common questions we receive about MTD for Income Tax.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is HMRC's digital reporting system for certain sole traders and landlords. It requires digital records and periodic reporting using compatible software.

Does MTD apply to taxi drivers?

It can. Taxi drivers operating as sole traders may need to use MTD for Income Tax if their qualifying income is above the relevant threshold and they meet the other requirements.

When does MTD start?

MTD for Income Tax is being introduced in stages. The first mandatory stage began on 6 April 2026 for qualifying income above £50,000 based on the relevant 2024–25 tax year. Further thresholds apply from April 2027 and April 2028.

What is qualifying income?

For MTD purposes, qualifying income is generally the total income from self-employment and property before expenses, based on the relevant tax year used to determine when the rules apply.

Do I still need to submit a tax return?

Yes. MTD does not simply replace all tax return obligations. The year-end process still involves submitting the relevant tax return and making any required adjustments, claims or other declarations.

Can Vanguard help me prepare for MTD?

Yes. Vanguard Accountants can provide accounting support to help you understand the requirements, organise your records and prepare for the digital reporting process.

Ready to Get MTD Ready?

Don't wait until your reporting requirements become a problem. Speak to Vanguard Accountants about your circumstances and find out how we can support you.

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