Making Tax Digital for Income Tax: What Yorkshire Businesses Must Know
HMRC's Making Tax Digital (MTD) programme is one of the biggest changes to the UK tax system in decades. If you are a self-employed individual or landlord in Yorkshire, this guide explains exactly what MTD means for you, what you need to do right now, and how to avoid being caught out.
What Is Making Tax Digital?
Making Tax Digital is HMRC's long-term plan to move the entire UK tax system online. Instead of filing one annual tax return, affected taxpayers will need to submit quarterly digital updates to HMRC using approved software — plus a final end-of-year declaration.
💡 Key Point
MTD does not just mean filing online. It means keeping digital records using HMRC-compatible software and submitting updates every three months — not just once a year.
MTD Rollout Timeline — Who Is Affected and When?
DateWho It AffectsIncome ThresholdApril 2026Self-employed & landlordsIncome over £50,000April 2027Self-employed & landlordsIncome over £30,000April 2028Self-employed & landlordsIncome over £20,000
⚠️ Important
These deadlines are firm. HMRC has already delayed MTD several times — but the current schedule is confirmed. If your income is above £50,000, you must be fully MTD-compliant before April 2026. Do not leave this until the last minute.
What Do You Need to Do?
Check whether your income exceeds the current threshold for your mandatory start date
Choose HMRC-approved MTD-compatible software — popular options include Xero, QuickBooks, FreeAgent, and Sage
Start keeping digital records of all your income and expenses from your MTD start date
Submit quarterly updates to HMRC through your software — these are summaries of income and expenses, not full tax returns
Submit your final end-of-year declaration by 31 January, just like a standard self assessment
What Software Should You Use?
Xero— excellent for small businesses, strong bank feed integration
QuickBooks— popular with sole traders, good mobile app
FreeAgent— simple interface, good for freelancers
Sage— strong option for larger businesses with staff
✅ SAS Tip
If you are already using spreadsheets to manage your finances, you do not necessarily need to switch to full accounting software. HMRC allows the use of bridging software that connects your spreadsheet to their systems — ask us about whether this option suits your situation.
What Are the Penalties for Non-Compliance?
HMRC is introducing a new points-based penalty system for MTD. Each missed quarterly submission earns a penalty point. Once you reach the threshold number of points, a £200 fine is issued — and further fines follow for continued non-compliance. Late payment of tax also attracts interest charges.
How SAS Yorkshire Can Help
Our team can help you choose the right software, set up your digital records correctly, and submit your quarterly updates on your behalf. We already manage MTD for VAT for hundreds of Yorkshire businesses — and we are fully prepared to support you through MTD for Income Tax.
