Question 1

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

Accepted Answer

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.

Question 2

Who needs to use it and when?

Accepted Answer

If you’re a sole trader or landlord and your combined gross income from self-employment and/or property is above the relevant threshold — £50,000+ for 2024/25 tax year (start 6 April 2026); £30,000+ for 2025/26 (start 6 April 2027). Even if you do not receive a letter you must still check your position.

Question 3

What will I actually have to do under MTD?

Accepted Answer

You (or your adviser) will need software that can create and store digital records of income and expenses, send a quarterly update for each income source, and submit your tax return via the software by 31 January following the tax year end.

Question 4

How do the quarterly updates work?

Accepted Answer

After each quarter ends you have one month to send your update. Standard periods are 6 Apr–5 Jul (due 7 Aug), 6 Apr–5 Oct (due 7 Nov), 6 Apr–5 Jan (due 7 Feb), 6 Apr–5 Apr (due 7 May).

Question 5

Do I have to keep every record digitally?

Accepted Answer

You must keep digital records of your self-employment and/or property income and expenses in compatible software. Other income types (such as dividends or pensions) do not need digital records, but your software must still include them when completing your return.

Question 6

How does the spreadsheet fit in?

Accepted Answer

Auto Sheets provides a guided spreadsheet that maps your categories to HMRC’s required fields. You record transactions as you go; our system totals the quarter and submits the figures to HMRC via the required digital link.

Question 7

What if I make a mistake in a quarterly update?

Accepted Answer

HMRC allows corrections to be reflected in later updates or at year-end; you do not resend the original quarterly update. Auto Sheets guides you how to correct the figures.

Question 8

What about penalties if I’m late?

Accepted Answer

HMRC operates a points-based late submission system. The safest approach is to file each quarterly update on time. Auto Sheets provides reminder prompts and makes the process simpler.

autoSheets Template

Stay in control of your bookkeeping and get ready for Making Tax Digital for Income Tax - without paying for complex accounting software.

The autoSheets Template lets you record income and expenses digitally in a simple Google Sheet that’s ready for HMRC’s quarterly submissions.

How it works

Get your free MTD-ready spreadsheet

We’ll email you updates and guidance before submissions open in 2026.