Making Tax Digital

Making Tax Digital goes live in 2026

Significant changes are being introduced to the UK tax system.

From 6 April 2026, sole traders and landlords with an annual gross income exceeding £50,000 will be legally required to comply with Making Tax Digital (MTD) regulations.

Under MTD rules, affected individuals must maintain digital records using HMRC-compliant software and submit quarterly summaries of their income and expenses to HMRC. A final declaration must also be submitted at the end of each tax year, effectively replacing the current annual Self-Assessment tax return process.

This government initiative aims to simplify and modernise tax reporting by shifting to a digital-first system. By recording and submitting tax data in real time, MTD is designed to provide taxpayers with a clearer, more accurate understanding of their tax obligations, and a more efficient way to manage them.

Making Tax Digital – key details

• Goes live: 6 April 2026
• Must keep digital records and submit quarterly updates to HMRC using MTD-compatible software
• Sole traders and UK landlords with an annual gross income over £50,000 must comply
• Future rollout:
  • From April 2027: Mandatory for sole traders and UK landlords with gross income over £30,000
  • From April 2028: Mandatory for sole traders and UK landlords with gross income over £20,000

Get ahead of the game: MTD now

To guarantee you are MTD compliant you need to ensure you have the following before April 2026:

• A separate bank account (this can be a personal or business bank account, but must be separate to your regular personal account)
• A Xero account – if you do not already have an account we can set this up for you
• A Hubdoc account (from Xero – HCA can set this up for you on your Xero account)

Don’t get caught out

These new rules will be live from 6 April 2026 and there are monetary fines for those that do not comply. To encourage quarterly updates, HMRC are implementing a points-based penalty system including: 

Get ahead of the game and make sure you are MTD-compliant well before 6 April 2026.

HCA can ensure a seamless transition

Here at HCA, we can help make the transition as easy as possible.

For our existing clients and Xero users, we can set up the additional Hubdoc service on your Xero account at your request. All you need to do is register your interest here and we will be in touch with next steps.

Existing client but don’t already use Xero?

When the changes go live on 6 April 2026, all sole traders and landlords with an annual income of £50K+ will need to use compatible accounting software. At HCA we can set up your Xero account and ensure you are signed up to Hubdoc from Xero – the new MTD feature that allows users to upload all their documents and receipts ready for the quarterly uploads to HMRC.

Click here to register your interest.