The way sole traders and landlords report income to HMRC is undergoing its biggest change in decades. From 6 April 2026, “Making Tax Digital” (MTD) for Income Tax becomes mandatory for many, and the countdown has officially begun.
Do the new rules apply to you?
HMRC is phasing this in based on your total gross income:
- From April 2026: Mandatory if your qualifying income is over £50,000.
- From April 2027: Mandatory if your qualifying income is over £30,000.
- From April 2028: Mandatory if your qualifying income is over £20,000.
What changes for you?
Instead of one annual Self Assessment, you must now:
- Keep Digital Records: Use HMRC-compatible software for all business transactions.
- Submit Quarterly Updates: Send a summary of income and expenses every three months.
- Final Declaration: Submit a final end-of-year declaration by 31 January to finalize your tax position.
How MR Associates and Xero can help
Transitioning to a new system can be daunting, but it’s also an opportunity to gain better control over your finances. As Xero Certified Specialists, we provide full support to get you MTD-ready:
- Software Setup: We’ll migrate your records to Xero, ensuring you are 100% compliant with HMRC’s digital requirements.
- Ongoing Support: We don’t just set it up and leave you; we can manage your quarterly submissions, ensuring they are accurate and on time.
- Strategic Advice: With real-time data in Xero, we can help you look forward and plan your tax efficiently throughout the year, rather than just reacting at year-end.
Don’t wait for the deadline.
HMRC is currently offering a “soft landing” with no penalty points for late quarterly updates in the first year (2026/27), making now the perfect time to switch and get used to the new rhythm without pressure.
Ready to simplify your tax?
Contact Matthew and the team at MR Associates to discuss how we can get your business or rental property MTD-ready with Xero.
Making Tax Digital made easy. Because smart business is common cents.