Making Tax Digital for Income Tax (MTD for IT) requires most UK sole traders and landlords to keep digital records and use MTD-compatible software to update HMRC throughout the year.
Making Tax Digital (MTD) is HMRC's programme to make tax administration more digital. MTD for Income Tax (MTD for IT) brings self-employed people and landlords into that programme: instead of submitting a paper return at the end of the year, qualifying businesses keep digital records and send updates to HMRC using MTD-compatible software through the year. The Self Assessment return itself does not disappear immediately — many of these changes sit alongside it at first — but the record-keeping and reporting obligations become digital, and HMRC receives regular updates on your income and expenses from your software.
MTD for Income Tax applies from the tax year following 2025/26 to self-employed individuals and landlords with annual gross income over £50,000. From April 2027, the requirement extends to those with gross income over £30,000. Those thresholds mean the smallest businesses are not yet in the mandatory programme. If you are within the thresholds you must keep your records digitally and use compatible software to send quarterly updates on your income and expenses to HMRC, plus end-of-period statements. Those updates replace none of your other obligations — you still file your Self Assessment return, and the figures you have reported through the year flow into it.
Under MTD for IT you must keep records of your income and expenses in digital form — not paper — and use software that is compatible with HMRC's MTD service. The software must be able to send the required updates and show HMRC your figures on request. Spreadsheets can be used as part of your digital record-keeping, but they must be linked to compatible software that submits the updates. If you have more than one business, you keep separate records for each one. The digital records underpin everything you report, so good book-keeping habits — recording each transaction as it happens — become the foundation of your tax position.
KAZAALBAIDA is built around keeping organised digital records of your income and expenses throughout the year — exactly the habit MTD for Income Tax formalises. The platform tracks your self-employment and property figures in one place, categories your costs, and shows your running profit and estimated tax position at any time. At Self Assessment time it generates a pre-filled SA103-style summary from the same records, so the figures you report are consistent with the books you have kept all year. KAZAALBAIDA is not HMRC-authorised MTD software — check with your accountant or HMRC for the software you need to send MTD updates — but it keeps the underlying records organised and traceable.
Making Tax Digital for Income Tax (MTD IT): what the MTD requirement means for UK sole traders and landlords, and how digital records work.
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