What is Making Tax Digital (MTD) for Income Tax?

It’s HMRC’s new way for sole traders and landlords to keep digital records and send regular updates instead of doing everything just at year-end. From 6 April 2026, some individuals with qualifying income will have to use it.

Who needs to use it and when?

If you’re a sole trader or landlord in Self Assessment and your combined gross income from self-employment and/or property is above the relevant threshold:

• £50,000+ in 2024/25 tax year → start from 6 April 2026
• £30,000+ in 2025/26 tax year → start from 6 April 2027

Even if you do not receive a letter from HMRC you are still responsible for checking whether you must use it.

What will I actually have to do under MTD?

You (or your adviser) will need software that can:

• create and store digital records of your self-employment and/or property income and expenses
• send a quarterly update for each income source
• submit your tax return via the software by 31 January following the tax year end

How do the quarterly updates work?

After each quarter ends you have one month to send your update. The standard periods are:

Your compatible software will guide you when to send each update.

What happens at year-end?

You will use your software to finalise the year and submit your tax return by 31 January. The software must let you review the figures and declare that the information is correct and complete.

Do I have to keep every record digitally?

You must keep digital records of your self-employment and/or property income and expenses in compatible software. You do not need digital records for other income types (such as dividends or pension income), but your software must still be able to include them in your return.

How does the spreadsheet fit in?

autoSheets provides a guided spreadsheet that maps your income and expenses into the categories required by HMRC. You simply record transactions as you go; our system totals the quarter and, when submissions are live, sends those totals to HMRC via the required digital link. You keep using a spreadsheet – we handle the submission mechanics.

Will autoSheets remind me and help me avoid mistakes?

Yes. Inside the spreadsheet and our submission flow you’ll see simple checklists, category hints, and prompts for deadlines. If a figure looks off (for example, a category total is missing) we’ll flag it before you submit.

What if I make a mistake in a quarterly update?

HMRC allows corrections to be reflected in later updates or at year-end; you do not resend the original quarterly update. We’ll guide you on how to correct figures in the next period or before you finalise your year-end submission.

Do I still need an accountant?

Not necessarily. HMRC allows you to manage MTD yourself using compatible software. autoSheets is designed for people who prefer to keep control of their records. If you do use an adviser, they can still act for you with the software.

How stressful is the quarterly process in practice?

We’ve designed the spreadsheet to be as simple as a checklist:

• Enter your income and expenses into clearly labelled rows.
• At quarter end, autoSheets totals and shows the figures you need.
• Click “Submit” – we send the update to HMRC, and you’re done.

You keep doing what you already know – spreadsheets – while we handle the submission mechanics and reminders.

What about penalties if I’m late?

HMRC operates a points-based late submission system across relevant taxes. The safest approach is to file each quarterly update on time. autoSheets provides clear reminders and an easy process to help you meet deadlines.