Making Tax Digital is here: what you need to do before August
It finally happened. After years of delays, extensions, and consultations, Making Tax Digital for Income Tax Self Assessment is live. From 6 April 2026, anyone with self-employment or property income above £50,000 must keep digital records and file quarterly updates with HMRC. Your first deadline is 7 August 2026.
That is not a typo. You have roughly three months from the start of the tax year to get compliant — choose HMRC-approved software, migrate your records, and submit your first quarter. If you are still using spreadsheets or shoeboxes, the clock is ticking.
The good news: HMRC will not penalise late quarterly submissions in the first year. The bad news: that grace period does not extend to your annual return, and the penalties for annual filing have not changed. Treat the first-year leniency as breathing room to get your systems right, not as permission to ignore it.
What counts as compatible software? HMRC maintains an approved list, but the short version is: Xero, QuickBooks, FreeAgent, and Sage all qualify. If you are running a property portfolio alongside a day job, you need software that handles both income streams and produces the quarterly summaries HMRC expects.
This is just the beginning. The income threshold drops to £30,000 from April 2027 and £20,000 from April 2028. Within two years, MTD will catch the vast majority of self-assessed taxpayers. Getting ahead of the curve now saves you the scramble later.
For landlords with multiple properties, the quarterly reporting requirement adds a genuine administrative burden. Each property's income and expenses must be captured digitally in near-real-time. The days of gathering receipts in January and hoping for the best are over.
If you are a founder with self-employment income, a landlord with rental portfolios, or both — you need to act now. Not next month, not next quarter. Now. The systems you put in place this month will determine whether MTD is a minor adjustment or a major headache.
At Stertha Advisory, we help clients choose the right software, migrate their records, and set up processes that make quarterly reporting painless. Book a consultation and we will get you compliant before 7 August.