MTD for Income Tax went live in April 2026 for sole traders and landlords with qualifying income over £50,000. The threshold drops in stages over the following two tax years, bringing more sole traders and landlords into scope each year. If you are unsure whether you are in scope this year, get in touch — we'll check.

Qualifying income is your gross income from self-employment and property, before expenses are deducted. Self-employment and property income are added together when checking against the threshold. Income from pensions, employment, dividends and savings does not count for the threshold test, but is still reported through your final declaration.

Limited companies are not in scope of MTD for Income Tax. Partnership profit does not count towards an individual partner's qualifying income for now, though partnerships will be brought in at a later date. People with only employment, pension, dividend or savings income are not in scope.

Four quarterly updates per year, plus a final declaration after the tax year ends. The quarterly periods are fixed by HMRC and the deadlines fall one month and seven days after the end of each quarter.

The final declaration replaces the SA100 for income inside MTD. If you have other income outside MTD — employment, pensions, dividends, capital gains — the final declaration covers that too, so you only file one return per year.

You must use HMRC-recognised software with a digital link from your records to your submission. Xero is fully recognised, and we use Xero exclusively. Spreadsheets alone are not enough, though bridging software can connect a spreadsheet to a submission — we do not recommend that route long-term.

A points-based penalty system applies. Each late quarterly update earns one point. At four points, HMRC issues a £200 penalty, and every further late submission triggers another £200 charge. For the 2026/27 tax year there is a grace period — HMRC will not apply penalty points for late quarterly updates in the first year — but late payment of tax still attracts penalties and interest.

he MTD threshold is being phased down over several years, so income just under the current threshold today will likely be in scope within one or two tax years. Most clients in this position choose to set up MTD-ready bookkeeping now rather than scrambling later. We can advise either way.

Each owner reports their share of the rental income separately, based on the ownership percentage. One owner may be over the threshold and inside MTD; the other may be under and outside it. We handle the split and the separate reporting, and make sure ownership percentages are documented correctly to avoid HMRC challenges.

A small number of people can claim a digital exclusion exemption — for example, if it is not reasonably practical to use digital tools because of age, disability, location or religion. The exemption is not automatic. We assess whether it applies and handle the application to HMRC.

We do bookkeeping repair as a standalone project. We rebuild the missing months, reconcile the accounts, and then get you onto Xero in time for MTD. The earlier you start, the easier the migration.

Yes. NDCA is regulated by the ACCA (Association of Chartered Certified Accountants).

We are remote first. We work with clients across the UK using Xero, so location does not matter.

Yes. Book one on 01903 968618 or via the contact form.

If your accountant isn't already onboarding clients to HMRC-recognised software and running quarterly submissions, it's worth asking why. Many high-street accountants are still adjusting to MTD. We've built our entire service around it — every client is on Xero, every record is digital, every submission is on time. If your current setup feels uncertain, we should talk.