Meta Description: MTD for Income Tax starts in April 2026. Learn the income thresholds, key dates, and how your family business can prepare today.
Running a family business is already demanding. From managing staff to balancing books, tax admin can feel overwhelming. But with Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) due to roll out from April 2026, it’s vital to prepare early.
What is MTD?
MTD is HMRC’s programme to digitise tax reporting. Instead of filing one annual tax return, you’ll need to:
– Keep digital records of income and expenses
– Submit quarterly updates to HMRC
– File a final declaration at year-end
Who Does It Affect and When?
The rollout is phased, based on gross qualifying income (from self-employment and property):
– From 6 April 2026: If your qualifying income for 2024–25 is over £50,000
– From 6 April 2027: If your qualifying income for 2025–26 is over £30,000
– From 6 April 2028: Government plans to extend to those with income over £20,000 (subject to legislation)
Important: This is based on gross income, not profit. Income from PAYE, dividends, or partnerships does not count toward the threshold.
Why Family Businesses Should Act Now
– Avoid last-minute software panic
– Spread the cost of digital adoption
– Improve cashflow visibility with real-time data
– Protect your family legacy by staying compliant
4 Steps to Get MTD-Ready
1. Choose compatible software—QuickBooks, Xero, FreeAgent, etc.
2. Go paperless—scan receipts, automate invoices, reduce errors.
3. Nominate a family member or accountant to handle quarterly updates.
4. Book a tax health check to ensure records are MTD-ready.
Final Word
MTD is more than compliance—it’s an opportunity to modernise your family business. Start preparing now, and avoid stress in 2026.
Book a free consultation with RMC Accountants to get your family business MTD-ready.