Making Tax Digital for Income Tax has been talked about for years, with delays and uncertainty along the way.
From April 2026, it is finally happening and it will affect many sole traders and landlords across the UK.
In our latest podcast, Francesca (Head of Payroll) sits down with Graeme (Director and Client Manager) and Lisa (Head of Management Accounts) at SeavorChartered to break down what Making Tax Digital really means, who it applies to and how businesses can prepare without unnecessary stress.
You can watch the full conversation on YouTube here:
👉 Watch the full episode on YouTube
What is Making Tax Digital?
Making Tax Digital is HMRC’s long-term plan to modernise the UK tax system. It moves businesses away from paper records and annual reporting, towards digital record keeping and more regular submissions using approved software.
VAT registered businesses have already been operating under Making Tax Digital for several years. From April 2026, the same approach will apply to Income Tax Self Assessment for eligible sole traders and landlords.
Who does it apply to?
Lisa explains that from 6 April 2026, Making Tax Digital for Income Tax will apply to:
- Sole traders
- Landlords
This applies where total income exceeds £50,000 per year. Importantly, this is based on turnover or rental income, not profit.
From April 2027, the threshold will reduce to £30,000. At this stage, Making Tax Digital does not apply to limited companies, LLPs or partnerships, although HMRC has confirmed this will change in future.
What quarterly reporting really means
A key point discussed in the podcast is that quarterly reporting does not mean quarterly tax payments.
Under Making Tax Digital for Income Tax, affected individuals will need to submit four quarterly updates during the year, followed by a final year-end declaration. Tax payments will still be due on 31 January and 31 July where payments on account apply.
The first quarterly submission will be due by 7 August 2026, covering the period from April to June.
Turnover vs profit
Graeme highlights one of the most common misconceptions around Making Tax Digital. It is based on income, not profit.
This means that even businesses making little or no profit may still need to comply if their turnover or rental income exceeds the threshold. Understanding this early is essential to avoid surprises.
Software and record keeping
Another major change is that HMRC will not provide a free system for submitting Making Tax Digital income tax updates. Third-party software is required.
During the discussion, the team talks through commonly used platforms such as Xero, QuickBooks and FreeAgent, and why ease of use and support matter just as much as cost.
Making Tax Digital also requires businesses to engage with their records more regularly. The days of handing over a year’s worth of paperwork in one go are coming to an end.
The real impact on businesses
Making Tax Digital will increase admin and introduce additional costs for some businesses, particularly where bookkeeping support is needed.
However, the team also discusses the positives. More regular reporting can give business owners a clearer picture of their finances, earlier visibility of tax liabilities and more opportunity to plan ahead rather than react at year end.
How Seavor Chartered supports clients
Every business is different, and there is no one-size-fits-all approach.
In the podcast, Francesca, Graeme and Lisa explain how SeavorChartered supports clients by:
- Assessing whether Making Tax Digital applies
- Recommending suitable software
- Providing training and ongoing support
- Offering full bookkeeping and compliance services where needed
The focus is on having a clear plan in place well before April 2026, so clients feel confident and prepared.
In summary
Making Tax Digital for Income Tax is happening and preparation matters. While the changes may feel daunting, with the right advice and systems in place they can be managed smoothly.
🎧 To hear the full discussion and get practical guidance, watch the full podcast episode here:
👉 Watch on YouTube
