Making Tax Digital —
simple, flexible
support
Making Tax Digital doesn't have to be complicated — but there's no one-size-fits-all solution. The right setup depends on your income sources, number of transactions, and how you manage your bank accounts. We tailor our MTD service to suit you.
How we tailor your service
- ✓ TaxDash is an all-in-one solution, ideal for simpler setups and lower transaction volumes — manage and submit everything in one place
- ✓ Xero is typically better suited for businesses with higher transaction volumes or more complex financial activity
- ✓ We assess your income sources, transaction volumes and banking setup before recommending a tool
- ✓ You choose how hands-on you want to be — self-managed or fully managed
- ✓ An accountant reviews every filing before it goes to HMRC
Which software
will we use?
Two tools — the right one depends on your situation
- Low number of monthly business transactions
- All-in-one: bookkeeping + tax return in one place
- Don't have a separate dedicated business bank account
- Best for landlords & small/self-employed clients, happy to capture individual transactions
- No extra software fees to submit your MTD returns
- Higher transaction volume
- Ideally need a separate business bank account to make use of bank feeds
- Automated bank feeds, rules & bulk reconciliation
- Attach receipts + real-time financial tracking
- Best for growing businesses wanting systems & integrations
- Software licence fees from £7 per month
If you use one bank account for both personal and business transactions, Xero's bank feed can actually create more work — you'd spend time separating personal from business entries on every import. In that case, TaxDash is almost always the better fit: you simply capture the relevant business transactions directly, without the noise. We only recommend Xero where a client has a separate bank account used exclusively for business.
Everything you need,
built into every plan
• Calendar Quarters: If using calendar quarters (starting 1 April), the deadline is still 7 August, 7 November, 7 February, and 7 May.
FAQs
Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is a new system enforced by HMRC that requires sole traders and landlords to keep digital records and send quarterly updates instead of a single annual tax return. Think of it as spreading your tax admin across the year rather than doing it all in one go in January. The rules apply from 6 April 2026 for those earning above £50,000.
It depends on your gross income from self-employment and/or property:
- From April 2026: You are affected if your combined qualifying income exceeds £50,000
- From April 2027: The threshold drops to £30,000
- From April 2028: It drops further to £20,000
Qualifying income means your gross turnover or rent received before any expenses. It excludes source like employment income, dividends, savings interest, pensions and capital gains. If you are not sure whether your income qualifies, we are happy to check for you.
The first mandated tax year is 6 April 2026 to 5 April 2027. If your qualifying income is above £50,000 based on your 2024-25 submitted return, you will need to be set up and submitting quarterly updates from April 2026 onwards. This is a firm date, HMRC has confirmed it will not be delayed again. That means if you have not sorted your software by April 2026, you will already be late.
No, and this is the single biggest misconception about MTD. Quarterly updates are not tax payments. They are simply a summary of your income and expenses sent digitally to HMRC four times a year. Your tax is still calculated once a year and paid in the usual way, on 31 January. The quarterly submissions just mean HMRC (and you) can see an estimate of your tax position as the year progresses, rather than getting a surprise in January.
Each quarterly update contains a summary of your income and allowable expenses for that three-month period. For self-employed income, that means your turnover and business costs. For property income, that means your rental receipts and expenses such as repairs, insurance, and letting agent fees. The four quarterly periods run to 5 July, 5 October, 5 January, and 5 April, with submission deadlines one month after each period ends.
Please note that TaxDash follows the UK tax year (6 April to 5 April) rather than the calendar year. If you currently record or report your income and expenses on a calendar year basis, you will need to align these to the tax year when submitting information through the portal.
Yes. The four quarterly updates are in addition to, not instead of, your annual tax return. Under MTD, this is called the Final Declaration (equivalent to the old SA100 Self Assessment return). Once all four quarterly updates are complete and any additional year-end information is added (such as Gift Aid, pension contributions, or savings income), you confirm your final tax position. The deadline for the Final Declaration is 31 January, the same date as always. At TaxDash, the Final Declaration and your full tax return are included in our managed service.
Spreadsheets alone are not MTD-compliant, because HMRC requires submissions to be made through HMRC-recognised software with a direct digital link to the HMRC systems. However, you can use a spreadsheet to record your data and then use bridging software to submit it. Alternatively, and this is what most people find easier, you use MTD-compatible software like TaxDash from the start, which handles both the record-keeping and the submissions in one place.
MTD requires your records to be kept digitally, but it does not require you to scan every receipt (though it is good practice). The key requirement is that your income and expense transactions are recorded in MTD-compatible software and that those records are available for HMRC to inspect if requested. On TaxDash, you can store copies of receipts, invoices, and letting agent statements directly in the platform so everything is in one place.
The number of properties is irrelevant. It is your gross rental income that determines whether MTD applies. If your total rent received across all properties exceeds £50,000 (from April 2026), you must comply, regardless of whether that income comes from one property or ten. A single London flat renting at £4,500 per month would put you in scope at £54,000 gross rent per year. If your total rent is below the threshold, you are not affected until the threshold drops to your level.
Please note, Phase 1 requirement applies to qualifying income over £50,000. If your turnover is exactly £50,000, you fall outside Phase 1 and will instead join MTD from 6 April 2027 under Phase 2, which captures qualifying income over £30,000.
For jointly owned property, each spouse is assessed on their share of the income, usually 50/50 for married couples, unless a different split has been formally declared to HMRC via Form 17. Each person needs to be registered for MTD separately if their individual share (combined with any other qualifying income) exceeds the threshold. At TaxDash, we offer a household rate that covers both partners at a reduced combined fee, with shared records reviewed once and allocated between both returns.
MTD is a legal requirement for those in scope, non-compliance is not a choice. From 2027/2028, the HMRC points-based penalty system applies in full. Each missed quarterly update or final declaration earns one penalty point, and reaching four points triggers a £200 fixed penalty. Each subsequent missed submission beyond that threshold incurs a further £200. For 2026/2027 only, HMRC has confirmed a soft landing where no penalty points will be issued for late quarterly update submissions in the first year.
That grace period applies to quarterly update submissions only. Your tax payment dates (balancing payment and payments on account) remain exactly as they are today, and late payment penalties apply to those in full with no equivalent grace period. Interest runs from the day after the due date. A 2% penalty is charged on any amount still outstanding after 15 days, with a further 2% after 30 days and escalating annual penalties beyond that.
Once registered, there are only two routes out. If your qualifying income drops below the threshold, you must remain below it for three consecutive tax years before you can opt out, a single lower-income year is not sufficient. If you cease all qualifying income entirely, meaning you stop trading and have no rental income remaining, you can exit immediately by contacting HMRC by phone or webchat and confirming cessation of all MTD income sources. Ceasing one source while retaining another keeps you within MTD for the remaining source, even if that source alone would fall below the threshold. If you think your income is near the threshold or fluctuates year to year, speak to an accountant before assuming you are exempt.
No. Your qualifying income is the total income you get in a tax year from self-employment, UK property and foreign property. All other sources of income reported through Self-Assessment do not count towards your qualifying income, such as income from employment (PAYE) or dividends (including those from your own company).
Please note: Partnerships are currently excluded from MTD. HMRC has indicated this is temporary, partnerships will be brought into scope at a future date yet to be confirmed.
Pension income is not included. Your qualifying income is the total income you get in a tax year from self-employment, UK property and foreign property.
If your 2024/2025 income is below £50k but will exceed £30k in 2025/2026 then you will be mandated to join MTD from 6 April 2027.