What is Making Tax Digital for income tax?
Answered 11 March 2026
Making Tax Digital for Income Tax
What the law says
Making Tax Digital for Income Tax (MTD for IT) is governed by the Income Tax (Digital Requirements) Regulations 2021 (as amended by the Income Tax (Digital Requirements) (Amendment) Regulations 2024), which come into force on 6th April 2026.
A "relevant person" (i.e. someone to whom Schedule A1 of the Taxes Management Act 1970 applies) must use functional compatible software to comply with the following "digital requirements":
- Keep and record digital records
- Preserve those digital records
- Provide quarterly updates to HMRC
- Provide corrections to digital records
Digital records must include: the financial information in update information; details of the items comprising that financial information; the amounts of those items and dates on which they were received or incurred; and any other information specified by HMRC notice.
A relevant person must provide HMRC with update information for each quarterly update period for each tax year.
Income exemption thresholds apply: the digital requirements do not apply to a person:
- For 2026–27, if their qualifying income for 2024–25 is not more than £50,000; and
- For subsequent tax years, if their qualifying income for the most recent relevant tax year is not more than £30,000.
A person's qualifying income is the sum of income from each business carried on by the person in that tax year, as included in their Self Assessment return under section 8 of TMA 1970 (excluding qualifying care receipts).
HMRC guidance / practice
MTD for Income Tax originated from the government's March 2015 Budget announcement of a vision to modernise the tax system as an alternative to the Self Assessment tax return, making it easier for individuals and businesses to get their tax right.
In summary, MTD for Income Tax requires:
- Digital record keeping using third-party software
- At least 3-monthly updates of summary income and expenses submitted via software
- An annual declaration (submitted by the earlier of 31 January or 10 months after the end of the accounting period)
The scheme primarily affects self-employed businesses and landlords with qualifying income above the relevant threshold.
Where an agent is authorised, they can: sign a client up for MTD for Income Tax; create, store and correct digital records of self-employment and property income and expenses; send quarterly updates to HMRC; and submit the tax return and pay tax due by 31 January the following year. An agent can only sign up a client if the client has registered for Self Assessment and already submitted a tax return. Agent authorisation for MTD for Income Tax is completed via a digital handshake through the Agent Services Account, replacing the need for a form 64-8.
Citation sources
Customers authorise agents using a digital handshake completed through the agent services account. The digital handshake replaces the requirement for a 64-8 and is recorded on ETMP within the relationship category. The digital handshake is used to authorise agents to transact on behalf of customers for: Making Tax Digital for VAT Plastic Packaging Tax 60 Day Capital Gains Reporting Trusts & Estates Registration Service Income Record Viewer (IRV) MTD for Income Tax (ITSA) customers In addition, a
Citation and commencement 1 These Regulations may be cited as the Income Tax (Digital Requirements) (Amendment) Regulations 2024 and come into force on 14th March 2024. Amendment of the Income Tax (Digital Requirements) Regulations 2021 2 The Income Tax (Digital Requirements) Regulations 2021 are amended as follows. 3 In regulation 1, for “2024” substitute “2026” . 4 In regulation 2— a omit the following definitions— i “designatory information”; ii “end of period information”; iii “end of period
When authorised, your agent can: sign you up for Making Tax Digital for Income Tax create, store and correct digital records of your self-employment and property income and expenses send your quarterly updates to HMRC submit your tax return and pay tax due by 31 January the following year Find out more about Making Tax Digital for Income Tax.
PART 1 General Citation and commencement 1 These Regulations may be cited as the Income Tax (Digital Requirements) Regulations 2021 and come into force on 6th April 2026 . Interpretation 2 In these Regulations— “TMA 1970” means the Taxes Management Act 1970; “Commissioners” means the Commissioners for Her Majesty’s Revenue and Customs; ... “digital records” has the meaning given by regulation 6; “the digital requirements” has the meaning given by regulation 3(1); “digital start date” has the mea
that business. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The digital start date that applies to the business is 6th April in the year of assessment following the year of assessment in which the person was required to deliver the return. PART 2 Digital records Keeping and recording digital records 5 1 A relevant person must keep digital records for each business for the period beginning with the digital st
Your agent can sign you up to some tax services and create an authorisation request. If your agent signs you up for a tax service, sign in to your personal or business tax account to either: check that the service is displayed add the service to your account Your agent can only sign you up to Making Tax Digital for Income Tax if you have registered for Self Assessment and already submitted a tax return. If your agent cannot sign you up for a particular tax service, you need to: Sign up to each t
on ceased to be digitally excluded and to subsequent tax years. PART 8 Other exemptions Income exemption 21 1 The digital requirements do not apply to a person for a tax year to which the exemption in this regulation applies. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The exemption applies— a for the tax year 2026-27, if the amount of the person’s qualifying income for the tax year 2024-25 is not more than £50,000, and b for subsequent tax years, if the amount of the per
In the March 2015 Budget the government announced its vision for modernising the tax system in order to make it easier for individuals and businesses to get their tax right and keep on top of their affairs, meaning an alternative to the Self-Assessment tax return system. Changes were introduced gradually from April 2017 ahead of legislative changes introduced from April 2018 for businesses and landlords with a turnover exceeding the VAT registration threshold and from April 2019 for those with a