When do I need to register for self-assessment?

If you are required to submit a self-assessment tax return to HMRC, registration must be completed by 5 October following the end of the relevant tax year. The tax return submission deadline is 31 January following the end of the relevant tax year.

I am non-UK resident/non-UK domiciled. Can I use HMRC’s software to submit my tax return?

HMRC’s software does not support submission of tax returns for non-UK resident or non-UK domiciled individuals. Residence and domicile is a complex area and is often investigated by HMRC.

I have sold a property. Do I need to submit a capital gains tax return?

A capital gains tax return is not always required when an individual sells a property. Whether or not a return is required will depend on several factors, including but not limited to the type of property sold, the capital gain or loss on disposal, the use of the property throughout the period of ownership and the residence status of the vendor. Please note that if a capital gains tax return is required, the deadline for submission is usually 30 days from the date of completion. With high penalties for late submission, timely submission is key.

Making Tax Digital for Income Tax | Self-Employed & Landlords

Expert MTD advice to save time, reduce errors, stay compliant, and boost profits

Making Tax Digital (MTD) for Income Tax is being phased in for self-employed individuals and landlords, starting with those on higher incomes and ultimately extending to most taxpayers as part of HMRC’s move to a fully digital tax system. This landmark shift will require digital record-keeping, quarterly submissions to HMRC, a final year-end submission, and the mandatory use of MTD-compliant software.

What is Making Tax Digital and why it matters

Making Tax Digital is HMRC’s initiative to modernise and digitise the UK tax system and tax reporting.

It is designed to improve accuracy, reduce errors, and help individuals and landlords manage tax in real time. However, without the right systems and advice, it can create more admin, increase the risk of mistakes, and cause unnecessary stress.

MTD and the final year-end submission

While MTD for Income Tax requires digital record-keeping and quarterly submissions, you will still be required to submit a final year-end submission to HMRC by 31 January following the end of the tax year. This will bring together your quarterly updates, reconcile your records, apply adjustments and ensure all tax reliefs and allowances are properly claimed. It remains a crucial step in confirming your tax position is both complete and accurate.

Whilst some taxpayers may choose to deal with their own MTD quarterly reporting requirements, many will request support from their accountant to deal with the new obligations in what is already a complex UK tax system.

At Rayner Essex, we will handle all of your compliance reporting obligations and ensuring you are sent reminders to provide information on a timely basis so that key deadlines are not missed. If you would prefer to manage your own quarterly submissions directly with HMRC, we can advise you on software suitable for your individual circumstances.

Making Tax Digital – Who it affects and what’s required

Making Tax Digital for Income Tax applies to most self-employed individuals and landlords with business or property income above a set HMRC threshold. Those who meet the criteria must:

Keep digital business or property income and expense records in HMRC-approved software

Submit quarterly updates of income and expenses to HMRC via MTD-compatible software

Complete a final end-of-year submission reconciling annual figures

Business partnerships (including LLPs) are not currently within the scope of MTD however they are expected to come under Making Tax Digital for Income Tax in the future. HMRC has confirmed that regulations for partnerships will follow, although no fixed date has yet been announced. In the meantime, partnerships should prepare by reviewing their record-keeping practices and considering MTD-compatible or bridging software.

A timeline of key changes

April 2022

April 2026

April 2027

April 2028

April 2022: MTD for VAT became mandatory for all VAT-registered businesses, including those below the turnover threshold, requiring digital VAT records and submission via MTD-compatible software.

April 2026: Phase 1 – MTD for Income Tax will be applicable to self-employed individuals and landlords with qualifying income over £50,000.
April 2027: Phase 2 – Thresholds are gradually lowered, bringing more taxpayers into the system. MTD will apply to self-employed individuals and landlords with qualifying income over £30,000, further widening the scope.
April 2028 (planned final phase) – MTD for Income Tax will apply to self-employed individuals and landlords with qualifying income over £20,000.

You can also choose to sign up to MTD earlier than your mandatory registration date, so you can be fully prepared when the rules become mandatory.

Note on VAT:

If you are VAT-registered, MTD for VAT already applies, regardless of turnover. All VAT-registered businesses must keep digital VAT business records and file VAT returns using MTD-compatible software, unless otherwise exempt.

If you want the most up-to-date thresholds and deadlines, visit our article here.

Making Tax Digital services from Rayner Essex

At Rayner Essex, we remove the burden of MTD. Our MTD expert accountants provide clear, strategic advice: helping you choose the right software, ensure every submission is accurate, and optimise your tax position. More than just compliance, we help you use MTD as an opportunity to improve efficiency, reduce risk, maximise tax reliefs, and uncover opportunities for growth.

Our Cloud Accounting Solutions team has extensive experience in supporting self-employed individuals and landlords through every aspect of MTD.

We provide a full MTD service including:

Setting up of HMRC-compliant digital accounting software
Training and guidance on use of cloud-based platforms (e.g. Xero, QuickBooks, Sage)
Bookkeeping and digital record-keeping
Preparation of quarterly tax submissions to HMRC
Ongoing compliance checks and tailored advice
Full support and expertise on MTD for VAT and MTD for Income Tax.

More than compliance, we use the data and processes established under MTD to help you achieve better results, helping you to find new opportunities for your business:

Tax efficiency:
Reviewing your income and expenditure to structure your business and transactions in the most tax-efficient way possible, ensuring you’re not paying more tax than necessary while remaining fully compliant with HMRC regulations.

Capital allowances:
Identifying and claiming all available capital allowances on qualifying assets, assessing your investments to maximise reliefs and reduce taxable profits.

Business growth and restructuring:
Whether you’re expanding your property portfolio, taking on new income streams, or changing how your business is set up, we provide strategic tax advice to support your goals while minimising risk and liabilities.

Key steps for Making Tax Digital for Income Tax Self Assessment

Step 1 – Check if and when you have to register

MTD for Income Tax will apply to self-employed individuals and landlords whose total annual income exceeds HMRC’s set thresholds (£50,000 from April 2026, £30,000 from April 2027). We will assess your situation and ensure you are registered at the right time.

You can also choose to sign up voluntarily for MTD for Income Tax. Doing so allows you to test the process, familiarise yourself with compatible software, and avoid the pressure of leaving it until the last minute. We recommend early sign-up where possible, as it gives you more time to adapt and reduces the risk of errors when MTD becomes mandatory.

Step 2 – Check you have the right software

Before you sign up, you must have software that:

Allows you to submit your quarterly returns to HMRC
Is compatible with Making Tax Digital for Income Tax

HMRC has a list of software suppliers, including bridging software that is already compatible with MTD. At Rayner Essex, we support both approaches. If you prefer to continue keeping records in simple Excel spreadsheets, we can manage the process for you through bridging software, ensuring your submissions remain fully compliant without changing how you currently work.[JT1]

For those who want to move to a fully cloud-based system, we have extensive expertise in leading platforms such as QuickBooks, Xero and Sage and can recommend the right options for your business needs. We can advise on the right solution, set everything up for you and provide training and ongoing support. Whether you want to keep things simple with spreadsheets or unlock the wider benefits of cloud accounting, our team can ensure your MTD compliance is handled smoothly and effectively.

Step 3 – Sign up for Making Tax Digital

It is important to ensure you have compatible software in place before you sign up.

After you have completed the sign-up procedure, HMRC will send you a confirmation email within 72 hours and your returns must be filed digitally going forward.

MTD services from Rayner Essex for self-employed and landlords

Our MTD services for self-employed individuals and landlords are designed to give you confidence that everything is handled correctly, without adding to your workload. We make the transition to digital record-keeping seamless, guiding you through the process and ensuring your chosen software, whether cloud-based or bridging software, works smoothly for your needs.

Once you are up and running, we manage the ongoing process: maintaining accurate records, preparing and filing quarterly submissions, and ensuring every detail meets HMRC’s requirements. This gives you complete peace of mind that your obligations are met without the burden falling on you.

What makes our service different is that we don’t just submit figures. We use the data created under MTD to deliver added value, reviewing your income and expenses for tax efficiency, maximising capital allowances, and advising on allowable expenses. For sole traders and landlords looking to expand, we also provide restructuring and growth advice so you can take informed decisions about the future of your business or property portfolio.

More than compliance – we make MTD work for your tax efficiency and growth, so you can focus on running and growing your business with success.

What type of businesses can benefit from our private client tax and trust services?

Rayner Essex work with a wide range of businesses of various sizes and sectors.

Sole traders

Partnerships

Limited companies

Start-up businesses

Small owner-managed businesses

Medium sized businesses, Corporates

Private clients and individuals

Multinationals

Making Tax Digital frequently asked questions

What are the penalties for not complying with Making Tax Digital for Income Tax (MTD for ITSA)?

If you do not comply with Making Tax Digital for Income Tax Self Assessment (MTD for ITSA), HM Revenue & Customs applies a points-based penalty system. Each missed submission, including quarterly updates or the final declaration, can result in a penalty point. However, HMRC has confirmed that no penalty points or financial penalties will be issued for missing quarterly update deadlines during the 2026 to 2027 tax year, allowing taxpayers time to adjust to the new requirements. This exemption applies only to quarterly updates. Penalties may still apply for missing the final declaration or for the late payment of tax. From the 2027 to 2028 tax year onwards, the points-based system will apply in full. Once the relevant threshold is reached, which is typically four points for those submitting quarterly, a £200 penalty is charged. Further £200 penalties will apply if additional submissions are missed while at the threshold. Penalty points can expire after a period of compliance, provided all outstanding submissions are brought up to date.

Can I be exempt from Making Tax Digital for Income Tax?

Most taxpayers who meet the MTD for ITSA criteria cannot opt out. However, HMRC allows exemptions in specific circumstances, such as if you’re unable to use digital tools due to age, disability, or lack of internet access in a remote location. To request an exemption, you must apply directly to HMRC and provide supporting evidence. If granted, you’ll be allowed to continue using non-digital methods. Without an exemption, compliance with MTD rules is legally required for eligible self-employed individuals and landlords.

What is the income threshold for MTD for ITSA?

From April 2026, MTD for ITSA will apply to self-employed individuals and landlords with total annual income over £50,000. This threshold will reduce to £30,000 from April 2027. If your income exceeds these limits, you’ll be legally required to keep digital records and submit quarterly updates using MTD HMRC- compliant software.

What software is compatible with MTD for ITSA?

You must use HMRC-recognised Making Tax Digital software to submit your income tax updates. Popular cloud accounting options include Xero, QuickBooks, and Sage, all of which are compatible with MTD for ITSA. Bridging software is also available if you prefer to keep records in spreadsheets, but it must link directly to HMRC’s systems. At Rayner Essex, we assess your needs and recommend the most suitable solution.

Do I still need to file a tax return under MTD for ITSA?

Yes. Although MTD replaces the annual Self Assessment with quarterly submissions, you will still need to complete a final year-end submission. This ensures your records are reconciled, adjustments are applied, and any tax reliefs or allowances have been correctly applied.

What records do I need to keep for MTD for ITSA?

Under MTD for ITSA, self-employed individuals and landlords must keep digital records of all business or property income and expenses. These records must be stored using HMRC compliant software and maintained in real time, ready for quarterly reporting. Digital record-keeping improves accuracy, reduces errors, and helps ensure you claim all eligible tax reliefs.

Testimonial

“We are extremely pleased with the service provided. The team is friendly, approachable and highly professional, and always available to offer clear advice and practical guidance. Their personal approach and responsiveness make them a valued and trusted partner.

Rory McDonald, Timac Agro UK Ltd.