Making Tax Digital for Income Tax: What UK Accounting Firms Should Be Telling Clients Right Now

Making Tax Digital for Income Tax started on 6 April 2026. Of the 780,000 sole traders and landlords required to comply in the first phase, only around 219,000 had signed up as of mid-April. That is fewer than three in ten.

The first quarterly submission deadline is 7 August 2026. Most of your affected clients have not filed anything yet and many do not know the deadline exists.

The accounting firms that communicate this clearly, before the 7 August deadline or after it, will be the ones clients remember when the letters from HMRC start arriving. If you have not sent anything yet, the time to do it is now.

What Has Actually Changed Since 6 April 2026

MTD for Income Tax replaces the traditional annual Self Assessment return for self-employed individuals and landlords above the income threshold — eight years after it was originally proposed.

From 6 April 2026, sole traders and landlords with qualifying gross income above £50,000 from self-employment and property must keep digital records and submit quarterly updates to HMRC using compatible software. The threshold drops to £30,000 from April 2027.

The first quarterly update covers the period 6 April to 5 July 2026 and is due on 7 August 2026. The first final declaration for the 2026-27 tax year is due on 31 January 2028. The rhythm your clients have relied on for years — one return, one deadline — is gone for anyone above the threshold.

Why Most Affected Clients Have Done Nothing Yet

HMRC has confirmed it will not penalise late submissions during the 2026-27 tax year, after which it will fine taxpayers £200 after four late submissions. That grace period is useful. It is also the reason most clients are doing nothing.

It cannot wait. The grace period covers penalties for late quarterly submissions. It does not cover the requirement to register, adopt compatible software, and begin keeping digital records. Clients who have not started cannot backfill a quarter of digital records on 6 August.

HMRC estimates that around 216,000 of the taxpayers in scope from April 2026 are unrepresented — meaning they have no accountant. Those clients are not getting this information from anyone. The ones who do have an accountant should be hearing it now. If they are not, they will draw the same conclusion as the unrepresented ones: that it can wait.

What Your Clients in Scope Need to Do Before 7 August

The communication brief for UK accounting firms on MTD right now covers four points.

Who is in scope

Self-employed individuals and landlords whose qualifying gross income from self-employment and property exceeded £50,000 in the 2024-25 tax year. Income from PAYE employment, dividends, investments, and pensions does not count towards the threshold. Combined income from multiple trades and property businesses does.

What they need to have done already

Register for MTD for Income Tax via HMRC. Adopt HMRC-compatible software for digital record-keeping. Begin recording income and expenses digitally from 6 April 2026.

What they need to do by 7 August 2026

Submit the first quarterly update covering 6 April to 5 July 2026. This is not a full tax return. It is a digital summary of income and expenses for the quarter, submitted through compatible software.

What happens from April 2027

The income threshold drops to £30,000 in April 2027, bringing a further 970,000 sole traders and landlords into scope. It drops again to £20,000 in April 2028, adding a further 975,000. Clients who are not in scope now may be in ten months.

Why This Is One of the Most Valuable Conversations UK Accounting Firms Can Have Right Now

MTD is not just a compliance obligation for your clients. It is a reason to call them, email them, and have the kind of conversation that moves a relationship from annual return to ongoing adviser.

A client who receives a plain-English explanation of what MTD means for their business, what they need to do, and why their accountant is the right person to help them through it, has just been reminded why they pay a professional rather than file their own return. That conversation does not cost anything. Not having it costs the relationship.

The UK accounting firms that are sending MTD communications to affected clients right now are not doing extra work. They are doing the work that retains clients for the next phase in 2027, and the one after that in 2028.

BOMA’s content library contains hundreds of articles written by chartered accountants and financial specialists, localised specifically for UK legislation and updated weekly as HMRC guidance develops. Every article is available in three formats — email, social media post, and website blog article — and formatted for multi-channel publishing in a single step.

The MTD communication your clients need is already written. If the 7 August deadline has already passed and you have not communicated anything, that is not a reason to stay quiet — it is a reason to send something today. The only question is whether your clients hear it from you or find out the hard way.

Browse the BOMA content library at bomamarketing.com/features/content-libraries/

Frequently Asked Questions

Has Making Tax Digital for Income Tax already started?

Yes. MTD for Income Tax became mandatory from 6 April 2026 for self-employed individuals and landlords with qualifying gross income above £50,000 from self-employment and property. The first quarterly submission, covering 6 April to 5 July 2026, is due on 7 August 2026.

Which clients need to comply with MTD for Income Tax from April 2026?

Sole traders and landlords whose combined qualifying gross income from self-employment and property exceeded £50,000 in the 2024-25 tax year. Income from PAYE employment, dividends, pensions, and investments does not count towards the threshold. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028.

Is there a penalty for missing the first MTD submission?

HMRC has confirmed it will not penalise late submissions during the 2026-27 tax year. From 2027-28, late submissions attract a £200 fine after four missed deadlines. The grace period does not remove the requirement to register, adopt compatible software, and begin digital record-keeping from 6 April 2026.

How many taxpayers are affected by MTD for Income Tax in the first phase?

HMRC estimates 780,000 sole traders and landlords are in scope from April 2026. By April 2028, when the threshold drops to £20,000, the total number affected will be close to 3 million. Around 216,000 of those currently in scope have no accountant and are receiving no professional guidance.

What is the difference between MTD for VAT and MTD for Income Tax?

MTD for VAT has been in place since April 2019 for VAT-registered businesses above the threshold. MTD for Income Tax extends the same digital record-keeping and quarterly reporting model to self-employed individuals and landlords. They are separate systems with separate registration requirements, even if the principle is the same.