What is Making Tax Digital?
Making Tax Digital for income tax is a new system for recording and reporting income and expenses for some people who are self-employed and/or receive property income, and for completing their annual tax return.
Content on this page:
Making Tax Digital explained
Making Tax Digital (sometimes referred to as MTD) is a new way that some people need to report tax information to HMRC. If Making Tax Digital applies to you, it requires you to:
- use software to keep digital records of income and expenses relating to self-employment and/or property income;
- submit quarterly updates summarising the income and expenses to HMRC;
- submit an annual tax return using Making Tax Digital software.
If Making Tax Digital applies to you then it is a significant change to the way tax information is reported to HMRC because:
- self assessment tax returns will no longer be used;
- HMRC will not be providing any online services to help you file tax return information so you will need to choose commercial software to use.
The way income tax (and National Insurance contributions if appropriate) is calculated and the payment dates are not changing under Making Tax Digital.
Remember Making Tax Digital for income tax only applies to individuals with self-employment and/or property income. It does not apply to companies or partnerships (although partnerships will join at a later date). However, a company shareholder/director or partner in a partnership may be in scope of Making Tax Digital if they have self-employment and/or property income.
Even if you have self-employment and/or property income you may not need to follow the new Making Tax Digital rules. In our guidance we explain in detail Who does Making Tax Digital apply to?.
What does Making Tax Digital mean for me?
When you must start reporting under Making Tax Digital will depend on your gross income (sales/total rental income) from your self-employment and/or property income. Some individuals were legally required to start reporting their income under Making Tax Digital from April 2026, some will need to do so from April 2027, and others will need to start from April 2028. However, you can choose to use Making Tax Digital voluntarily by signing up before your mandatory start date.
We explain who must use Making Tax Digital and from when in more detail on our page When does Making Tax Digital start for me?.
What to do next
If you have self-employment and/or property income you will need to consider if you must use Making Tax Digital and from when. You may not need to if you are automatically exempt or you may want to apply for an exemption, see our guidance Making Tax Digital Exemptions for more information.
If you don’t have to use Making Tax Digital and do not want to do so voluntarily, then you will continue to report your self-employment and property income through the Self Assessment reporting system.
