Making Tax Digital (MTD): What’s Changing and What It Means for You

October 2025

The government’s Making Tax Digital (MTD) programme continues to evolve. If you’re a client of RJP, you may already be familiar with it through MTD for VAT, which has been in place for some years. The next stage—MTD for Income Tax Self-Assessment (MTD ITSA)—has recently been updated, and here’s what you need to know.

The key update

• MTD for Income Tax Self-Assessment will be mandatory beginning from April 2028;
• It will apply to sole traders and landlords with combined business/property turnover above the prescribed thresholds;
• Those with a qualifying income of £50,000 or more will be required to join MTD in April 2026;
• Those with a qualifying income between £30,000 and £50,000 will be brought into MTD from April 2027;
• The scope has been expanded to include income of £20,000 and above in April 2028;
• MTD for Corporation Tax has been shelved for the time being—so no changes are planned there.

A quick reminder: what is MTD?

Making Tax Digital is HMRC’s plan to modernise the way individuals and businesses keep records and submit tax returns.

• Instead of filing one annual Self-Assessment tax return, you will need to keep digital records (using approved software or apps).
• You will also need to send HMRC quarterly updates of your income and expenses, with a final year-end statement to confirm your figures.
• The aim, say HMRC, is to reduce errors and make tax more “real-time,” though it will of course mean more frequent reporting.
How it fits with what we already know
• MTD for VAT has been live since 2019 (first for larger businesses, then extended to all VAT-registered businesses in 2022). Many of you will already be using digital software for VAT returns.
• MTD ITSA is a similar idea, but instead of covering VAT, it covers business and rental income that you currently declare in your annual Self-Assessment return.
• Corporation Tax: the government has confirmed that MTD for companies is not going ahead, so limited companies are currently unaffected.

Why this matters now

• The date for the initial tranche of those caught is looming very close
• The £20,000 threshold, although some time off, is relatively low. Many landlords with modest rental income or sole traders with part-time businesses will fall into the regime from April 2028.
• It will change how you interact with HMRC. Instead of one tax return per year, you will be sending five reports (four quarterly plus a final declaration).
• It will change the dates on which you collate your income and expenses – it can no longer be done annually.
• If you won’t be using RJP to file on your behalf, you will need to update your systems. If you are not already using compatible accounting software, this will become essential.

What will change for affected clients

1. Quarterly updates – every three months, you will need to send RJP your business and property income and expenses in time for us to will prepare and submit to HMRC a summary of your position. Note there will be only 1 month from the end of the quarter and the submission deadline;
2. Year-end finalisation – after the tax year ends, we will prepare and submit a final declaration similar to the current Self-Assessment return;
3. Digital record keeping – all business and property transactions must be recorded digitally in compatible software (such as Xero, QuickBooks, or similar). We can do this for you.
4. No change to payment dates (for now) – you will still pay your income tax in January and July as currently, although HMRC is exploring whether payments could be brought closer to real-time in the future.

What are the quarterly deadlines for submission?

Quarter Period covered Submission Deadline
Q1 6 April – 5 July 5 August
Q2 6 July – 5 October 5 November
Q3 6 October – 5 January 5 February
Q4 6 January – 5 April 5 May

How RJP LLP will support you

We know these changes may feel daunting, especially if you’re not currently using digital accounting tools. Our role will be to:
• Assess when you will fall within the scope of MTD;
• Have the right digital software in place to meet HMRC requirements on your behalf;
• Provide support so you can manage quarterly reporting with confidence;
• Monitor developments in case the government introduces further changes (e.g., to tax payment dates).

Next steps for our clients

• Check your turnover – ensure full details are available to assess your position at 6 April 2026;
• Start thinking about software if you intend to do your own submissions;
• Stay in touch: we will continue to update you as HMRC releases more guidance and will help you transition smoothly.

Bottom line

MTD is part of a long-term government drive to digitise tax. For VAT-registered businesses, the change has already happened. For sole traders and landlords, the big shift comes from April 2026 and onwards until 2028 when those within the relatively low £20,000 threshold will bring many more people into scope.

By starting early, RJP LLP clients can avoid a last-minute scramble and make the most of the available tools and support.