What is Making Tax Digital?

In short: Making Tax Digital (MTD) is a new HMRC system that makes you file your tax records digitally instead of on paper. It starts 6 April 2026.

The Actual Change

Right now, you might do your tax return once a year on paper or in a spreadsheet. With MTD, HMRC wants you to:

• Keep your records in digital format (spreadsheet, accounting software, whatever)
• Send updates to HMRC four times a year instead of once
• Use MTD-approved software to do it

Why Is HMRC Doing This?

1. Catch tax errors earlier
2. Make sure people pay the right tax
3. Stop people "forgetting" to declare income

Who Has to Do This?

If you're a UK sole trader or landlord earning more than £50,000 a year (gross), you have to use MTD from April 2026.