At LWA, we’ve already started supporting clients across Greater Manchester, Warrington, and beyond with preparing for these changes, so we wanted to share the latest information to help you understand what’s coming and how to get ahead.
What is Making Tax Digital for Income Tax?
MTD is a government initiative designed to bring tax reporting fully online, aiming to reduce errors and make the system more efficient for HMRC. If you are affected, this means:
- Keeping digital business records using software that is compatible with MTD.
- Sending quarterly updates of your income and expenses to HMRC.
- Submitting a final digital declaration at the end of the tax year, which replaces the current annual self-assessment tax return.
When and how will sole traders and landlords be affected by MTD?
The changes are being introduced in stages based on your total income from self-employment and property rental combined (before expenses):
- From April 2026 – income over £50,000
- From April 2027 – income over £30,000
- From April 2028 – income over £20,000
If you’re unsure whether your income meets these thresholds, we recommend seeking advice now, so you have plenty of time to prepare
Benefits and challenges of MTD
Some businesses and landlords may find benefits in the new system, such as:
- More frequent insight into your tax position.
- Fewer year-end surprises if records are kept up to date.
- Reduced risk of errors when using the right software.
However, there are important considerations to be aware of:
- Additional admin – quarterly reporting plus a year-end submission.
- Software costs – you’ll need to use MTD-compliant digital tools.
- Learning curve – especially if you’re used to keeping manual or spreadsheet records.
Landlords and sole traders can prepare now for MTD
The good news is, HMRC has launched a testing programme. You can sign up to practice using the new system before it becomes compulsory – a great opportunity to learn without the risk of penalties.
At LWA, we’ve already been helping clients make the move to cloud accounting software like FreeAgent and Xero, alongside providing training and ongoing support to make the transition as straightforward as possible.
Help with Making Tax Digital
Every business and landlord’s situation is different. Whether you’re already using digital tools or still working on paper records, we’re here to help you prepare in the way that works best for you.
If you’re worried about how MTD will affect you or need help getting started, please contact our team. You can reach us on 0161 905 1801 in our Manchester office, or call 01925 830 830 for our Warrington team. You can also send us an email to mail@lwaltd.com with ‘MTD advice’ in the subject field.