MTD for Income Tax: What It Means for Your Business in 2025

MTD for Income Tax: What It Means for Your Business in 2025

Making Tax Digital (MTD) for Income Tax is coming into effect in April 2026. If you're a sole trader or landlord earning over £50,000 a year, this change affects you.

HMRC wants to modernise how tax is reported. But for many small businesses, it feels like more admin, more confusion, and more chances to get it wrong.

Here’s what you need to know.

Who Needs to Follow the New MTD Rules?

If you're:

• A sole trader or landlord with income over £50,000

• Earning over £30,000 by April 2027

• Filing a Self Assessment tax return

You’ll need to keep digital records and send quarterly updates to HMRC using approved software.

This includes:

• Rental income

• Self-employed business income

• Any other taxable income you currently report via Self Assessment

If you’re not ready, you risk fines and missed deadlines.

What Does MTD for ITSA Actually Involve?

Under MTD for ITSA (Income Tax Self Assessment), you’ll:

• Submit quarterly tax updates to HMRC

• Use MTD-compatible software like Xero

• Send a final end-of-year summary

Paper records and spreadsheets won't cut it anymore unfortunately.

This means it’s time to ditch the manual work and move to a digital system that keeps you compliant, and actually saves you time.

Why Xero Makes MTD Easy

As an accountant, I help my clients stay ahead of these changes, and Xero is the software I recommend every time without fail.

Here’s why:

• Fully HMRC-compliant for MTD for Income Tax

• Automatic bank feeds

• Easy expense tracking

• Clean reports for quarterly updates

• Accessible on desktop or mobile

You don’t need to be a numbers expert. Xero keeps it simple.

👉 Try Xero with 90% Off for 7 Months – Click Here
(Limited-time offer for new users)

Need an Accountant Who Actually Handles This for You?

Most of my clients want two things:

1. To stay MTD compliant without the stress

2. To never deal with HMRC again

If that sounds like you, I can help.

I offer:

• Quarterly MTD submissions

• Full Self Assessment service

• Year-round support

• Help setting up Xero and training if needed

You don’t need to do this alone.

What’s Next?

The MTD deadline is getting closer. Start now, not later.
Here’s your action plan:

• Check if you're affected by visiting HMRC's MTD Overview here

• Get Xero set up today

• Book a call with me to get your MTD sorted

👉 Start Xero with 90% off now
👉 Call me now to have a chat