Making Tax Digital: Is Your Business Ready for April 2026?

Making Tax Digital for Income Tax - Are You Ready?

The UK government's Making Tax Digital (MTD) initiative is set to transform how sole traders and landlords report their income. With a phased rollout beginning in April 2026, it's crucial to understand the changes coming and prepare for them.

What's Changing?

MTD for Income Tax is a new system that will require affected individuals to:

• Keep digital business records. Paper records will no longer be sufficient on their own.

• Use HMRC-approved software to submit quarterly summaries of their income and expenses.

• Submit an annual final declaration that replaces the traditional Self Assessment tax return.

The term “qualifying income” refers to your total gross income from self-employment and property for a tax year, before expenses. This is the figure that determines if and when you'll be affected by MTD.

Who Will Be Affected and When?

The rollout is happening in stages, based on your qualifying income. About 2.9 million individuals will eventually be impacted. Here’s the breakdown:

Qualifying Income	When MTD Becomes Mandatory	Number of People Affected
Over £50,000	6 April 2026	Around 864,000
£30,000 – £50,000	6 April 2027	Around 1,077,000
£20,000 – £30,000	6 April 2028	Around 975,000

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HMRC figures from the 2023 to 2024 tax year are used to determine who is impacted.

Why You Need to Act Now

The move to quarterly updates means a significant change from the current annual tax return process. You won't be able to leave your bookkeeping until the end of the year. Instead, you'll need to keep your records up to date regularly.

HMRC's latest data shows that while many are already using software, a large number of affected individuals are not:

• Over £50,000 income: 63% already use commercial software.

• £30,000–£50,000 income: 49% use software.

• £20,000–£30,000 income: 48% use software.

  
  

If you are in the group that doesn't use software, it's time to start thinking about your options. Switching to digital record-keeping now will give you time to get comfortable with the new system and avoid a last-minute scramble.

MTD is on the horizon, but you don't have to face it alone. We're here to guide you through the transition and keep your business ahead of the curve with our new digital solutions.

How to Get Ready with RGA Accountants

1. Check your qualifying income: Add up your total gross self-employment and property income for the year.

2. Review your record-keeping: If you use paper records, they won't be sufficient for MTD. You'll need to transition to a digital system.

3. Consider software options: Cloud-based accounting tools are ideal as they make quarterly submissions easy and help you stay compliant.

   
   

We understand that MTD represents a significant change, and we're committed to ensuring our clients are ahead of the curve. To provide a complete and modern solution for your business management needs, we have created an independent company, GCR Business Solutions NI LTD.

This new company will work alongside RGA Accountants to provide a complete business management app, ensuring you have the tools you need for a smooth and stress-free transition.

We can help you choose the right software and show you how to use it, or if you prefer to stay away from software altogether, we can also provide a bookkeeping service. Whatever the case, we'll work with you to make the transition smooth and stress-free so when MTD arrives, you're already ahead of the game