Do you run your own business or earn income from property? Well, listen up. Making Tax Digital (MTD) is coming into effect from 6th April 2026, and there’s a pretty good chance it’ll affect you. We know there’s a lot of info out there (and let’s be honest, tax stuff isn’t always the easiest read), so we’ve cracked it open and broken it down into something a bit more digestible for our business eggs, sole traders and landlords.
What actually is Making Tax Digital?
Making Tax Digital, or MTD, is HMRC’s way of bringing the tax system into the digital age. Instead of keeping paper records or rushing everything together at the end of the year, you record your income and expenses digitally and send updates throughout the year.
Essentially, it’s designed to make tax more accurate, easier to manage and a little less stressful when deadlines are looming. So yes, this could finally mean the end of shoeboxes full of receipts and last-minute number crunching!
Does MTD affect everyone?
Not quite but it will affect a lot of people. MTD is mainly aimed at people who are self-employed or landlords earning income from property. If you currently complete a Self-Assessment tax return, there’s a good chance this will apply to you at some point.
When do you need to start thinking about MTD?
The changes are being rolled out in stages over the next few years, giving people time to adjust and get comfortable with the new way of working.
- From 6th April 2026: applies to those with a qualifying income over £50,000.
- From 2027: extends to those with a qualifying income over £30,000, with further expansion expected after that.
So even if it’s not relevant to you just yet, it is something worth being aware of and planning for early. A little prep now can save a lot of stress later.
What does this mean day to day?
In practice, MTD changes how and when you report your income. Instead of one annual tax return, you will send updates to HMRC every quarter, followed by a final end-of-year final declaration.
At first glance, that might sound like more admin (we hear you), but it can actually make life easier. Keeping things updated regularly means fewer surprises, less pressure at year end, and a much clearer view of your finances throughout the year. It is all about staying in control rather than playing catch up.
How do you get started?
The key thing with MTD for Income Tax is using the right digital tools. You will need software that allows you to keep records and submit updates directly to HMRC. This is where platforms such as our partner FreeAgent (super popular with our business eggs) can be really helpful, as they are designed to make the whole process straightforward and far less time-consuming.
If you want more information, the FreeAgent MTD hub is a great place to start, with simple guides on everything from signing up to understanding what the changes mean in real life. Getting set up early means you can take your time, build good habits and avoid any last-minute panic.
Once you are up and running, it can actually make managing your finances feel much more organised and under control.
If MTD still feels a bit confusing, you’re not alone and you don’t have to figure it out solo. A good accountant or bookkeeper is worth every penny and can take a lot of the stress off your plate. Good luck!
To find out more about egg partner FreeAgent, click here. Recommendations for an accountant or bookkeeper in Edinburgh can be found here.
FreeAgent accounting software is free with select business bank accounts, or if you are part of the egg community, enjoy 10% off for life. If you have been considering accounting software or need to get Making Tax Digital for Income Tax sorted, now is the perfect time to start and kick off the new tax year feeling confident.
