Making Tax Digital readiness checker

What Making Tax Digital actually changes

Three things, and only the first is the one people talk about.

Records go digital. Income and expenses have to be kept in software HMRC recognises, not in a notebook and not in a spreadsheet standing on its own. A spreadsheet can survive, but only with bridging software attached to it.

Reporting goes quarterly. Instead of one return long after the year has ended, you send 4 summaries during the year and then finalise. Each self-employment and each property business reports separately, so two trades and a rental is three sets of updates, not one.

The habit goes with it. This is the part that actually bites. A once-a-year catch-up in January cannot produce four on-time updates. The bookkeeping has to become a routine, and that is a behaviour change rather than a software purchase.

The dates, and how HMRC decides yours

HMRC tests your qualifying income on a Self Assessment return filed two years before the start date, then writes to you. The letter is a courtesy, not the obligation: if it does not arrive, it is still on you to check.

• Over £50,000 on the 2024/25 return, start 6 April 2026.
• Over £30,000 on the 2025/26 return, start 6 April 2027.
• Over £20,000 on the 2026/27 return, start 6 April 2028.
• Partnerships come in later. No date has been set.

Qualifying income is gross, before expenses. Add self-employment and property income together and compare the total, not the profit.

The three things practices tell us go wrong

• Digital links get broken by habit. Someone reads a total off one screen and types it into another. That is a break, even though nothing looks wrong on either screen.
• Sign-up gets assumed. The client thinks the accountant did it, the accountant thinks the client did. Confirm it, do not infer it.
• The first quarter is the one that hurts. Everything unresolved in the records surfaces at once. A dry run on a past quarter finds it while there is still time.

What this does not cover

• Exemptions. The checker asks whether you have looked, but it cannot tell you whether one applies. Some are automatic and some have to be applied for.
• Partnerships and companies. Different rules and, in the case of partnerships, no announced date.
• Choosing a product.We are not going to recommend software, because the right answer depends on your business and your agent. Start from HMRC's compatible list.

This is a guide for a conversation with your accountant, not a substitute for one.

Common questions

Who has to use Making Tax Digital for Income Tax? Sole traders and landlords registered for Self Assessment whose qualifying income is over the threshold for the relevant tax year. Qualifying income over £50,000 on the 2024/25 return means a start date of 6 April 2026. Over £30,000 on the 2025/26 return means 6 April 2027, and over £20,000 on the 2026/27 return means 6 April 2028. A timeline for partnerships has not been announced.

What counts as qualifying income? Gross income from self-employment and property added together, before you deduct any expenses. It is not profit, and that catches people out. A landlord with modest profits can have qualifying income well above the threshold.

What is a quarterly update? A summary of income and expenses for each business, sent to HMRC from compatible software 4 times a year. It is not a tax return and needs no accounting adjustments. On a standard, tax-year-aligned accounting period the deadlines are 7 August, 7 November, 7 February, 7 May. One is due even in a quarter with no income or expenses.

Can I still use a spreadsheet? Yes, but not on its own. You need bridging software that submits from the spreadsheet and keeps a digital link, so no figure is manually re-typed on its way to HMRC. Test it end to end before your first deadline rather than during it.

What happens if I miss a quarterly update? Late submission penalties are points based. Reaching 4 points triggers a £200 penalty. HMRC is not applying penalty points for late quarterly updates in the 2026/27 tax year, though points still apply to late tax returns.

If you are the practice, not the client

Every accountant we speak to is answering these ten questions on the phone, one client at a time. A checker on your own site answers them at three in the morning and tells you which clients are at risk before you have to chase them.

Built by Charged Studio. We build tools like this for professional services firms who want their website to do something useful. More on that in our guide to website design for accountants.

Rates: 2026/27 tax year, England, Wales and Northern Ireland. Checked against HMRC guidance on 5 August 2026. This is a guide, not advice. Figures assume a single company with no associated companies and a full twelve-month accounting period. Scottish income tax bands differ. Always check with your accountant before acting.

Want this on your own website? We build these for practices who want their site to do something useful rather than sit there. Ask us about it.