What is HMRC Making Tax Digital (MTD) and Who Does It Affect?

Making Tax Digital (MTD) is HMRC’s new system for reporting income tax. Instead of submitting one Self Assessment return each year, eligible taxpayers must keep digital records and send quarterly updates to HMRC using approved software.

MTD affects sole traders and landlords whose combined gross income from self‑employment and/or property exceeds HMRC’s phased thresholds.
The rollout begins with:

• April 2026: Income over £50,000
• April 2027: Income over £30,000
• April 2028: Income over £20,000

If you fall within these bands, you’ll be required to:

Keep digital records of income and expenses

Use MTD‑compatible software

Submit quarterly updates plus a final declaration each year

FiloWealth, with FiloTax and FiloPro, is designed to make this transition effortless — giving you compliant digital record‑keeping, real‑time tax visibility, and a smooth path to quarterly submissions.

What You Need To Do Over the Next Year

With MTD for Income Tax starting in April 2026 for those earning over £50,000, now is the time to prepare. The next 12 months should focus on getting comfortable with digital record‑keeping and choosing the right tools.

Here’s what users should do:

1. Confirm whether you’re in scope

Check your latest tax return to see if your combined self‑employment and property income exceeds the upcoming threshold.

2. Move to digital record‑keeping early

Start tracking income and expenses digitally now.
FiloPro makes this simple with AI receipt capture, automatic categorisation, and cloud‑based bookkeeping.

3. Choose MTD‑compatible software

You’ll need software that can submit quarterly updates directly to HMRC.
FiloTax is built for exactly this: fast, accurate, and fully integrated with your bookkeeping.

4. Prepare for quarterly submissions

From April 2026, you’ll submit updates every three months.
FiloTax provides reminders, real‑time tax estimates, and a guided submission flow so nothing gets missed.

5. Get familiar with the new workflow

Using FiloWealth now means you’ll already be comfortable with digital records, automated expense capture, and HMRC‑ready submissions long before MTD becomes mandatory