MTD for Income Tax

Making Tax Digital for Income Tax (MTD for IT) has now moved into implementation. From 6 April 2026, the first group of self-employed individuals and landlords with qualifying income over £50,000 came into scope.

Instead of relying on a single annual Self-Assessment return, affected taxpayers must now keep digital records, use compatible software and send quarterly updates to HMRC, followed by a final year-end declaration. The aim is to modernise tax administration and move reporting closer to real time.

The next stages of mandating are expected to widen the population affected, making this an important milestone not only for those already in scope but also for those who will need to prepare in the near future.

For many taxpayers, the first real test is now approaching. Under the standard quarterly cycle, the first quarter runs from 6 April 2026 to 5 July 2026, with the first quarterly update due by 7 August 2026. These updates are summaries rather than tax returns, but they still depend on accurate and timely digital records.

As a result, the challenge is not just understanding the rules, but making sure the right systems and processes are in place to support regular reporting by clients.

At Crowe, we have been helping clients move from awareness to action. Over recent months, we have worked with affected individuals, landlords and business owners to understand whether they fall within the new regime, what the changes mean in practice and how best to prepare for quarterly reporting. That has included reviewing qualifying income, considering how multiple income sources fit within the rules and helping clients understand what needs to be reported.

A major focus has been on practical readiness. MTD for IT is not simply a compliance change. It also affects day-to-day processes and bookkeeping. We have been supporting clients in reviewing bookkeeping arrangements, assessing whether existing software is suitable or recommending new ones, and putting in place digital record keeping processes that can support accurate quarterly updates. In many cases, this has involved establishing clearer routines for maintaining records, capturing the right source information and ensuring information can flow efficiently between Crowe and our clients ahead of each deadline.

With the first quarter’s deadline approaching, our support is increasingly focused on execution. We are helping clients check that digital records are complete, that income and expenses have been captured correctly and that submission processes are working as expected. For some, that means finalising a new way of working. For others, it means resolving issues that only become clear once a live reporting period is under way.

In all cases, the immediate objective is the same: to help clients approach the first quarterly update with confidence and build a stronger foundation for the reporting cycle ahead.

If you would like to discuss how Making Tax Digital could affect you or your clients, or need support preparing for your first quarterly update, please get in touch with your usual Crowe contract.