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MTD for IT FAQ: Everything You Need to Know

1. What is MTD for IT?

MTD for IT (Making Tax Digital for Income Tax) is part of HMRC’s plan to modernise the tax system. It means self-employed people and landlords must keep digital records of income and expenses and submit quarterly updates to HMRC using MTD-compatible software.

2. Who does MTD for IT apply to?

MTD for IT applies to:

• Self-employed people and landlords with annual business or property income over £50,000 from April 2026
• Those earning between £30,000 and £50,000 from April 2027
• Those earning over £20,000 from April 2028

HMRC is still looking at how the rules will apply to people earning under £20,000, so it is worth staying updated.

3. When does MTD for IT start?

• April 2026: Income over £50,000
• April 2027: Income between £30,000 and £50,000
• April 2028: Income over £20,000

4. What records do I need to keep digitally?

You will need to keep digital records of:

• Income
• Expenses
• Bank transactions linked to your business or property

These records must be stored in MTD-compatible software and submitted through quarterly updates.

5. How often do I need to report under MTD for IT?

You will need to send:

• Four quarterly updates each year to show your income and expenses
• An End of Period Statement (EOPS) at the end of the tax year to confirm your figures
• A Final Declaration to declare all income and confirm your tax bill

6. What software do I need for MTD for IT?

You must use MTD-compatible software to keep records and send updates. Popular choices include:

• QuickBooks
• Xero
• FreeAgent

We can help you choose the right one and set it up.

7. What happens if I do not comply with MTD for IT?

If you do not follow the MTD for IT rules, you could face penalties from HMRC for late updates or not keeping digital records properly.

8. Do I still need to file a Self Assessment tax return?

No — MTD for IT replaces the annual Self Assessment tax return. Instead, you will send quarterly updates, an End of Period Statement and a Final Declaration using your software.

9. How can we help with MTD for IT?

At [Pomroy Associates, we can:

• Give advice tailored to your situation
• Help you choose and set up MTD-compatible software
• Support you with quarterly updates and year-end tasks
• Offer ongoing help so you stay compliant and feel confident

10. What should I do now to prepare for MTD for IT?

• Work out when MTD for IT will apply to you
• Pick and set up your software
• Keep your records tidy and up to date
• Speak to your accountant early so the switch is smooth

Still Have Questions?

If you are unsure where to start, contact us. We are here to help you plan ahead and stay compliant with MTD for IT.

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