What Making Tax Digital actually is

Written by
Lucy Cohen - CEO of Mazuma
Last edited
July 13, 2026
Contents
INCLUDE HEADING IN H2

We’ve teamed up with Mazuma, our accountancy partner, to make Making Tax Digital easier to understand. This article is general information only, so please speak to a qualified accountant if you need advice about your own tax position.

Making Tax Digital, or MTD, changes how you report your tax to HMRC. Strip away the jargon and there are three core changes to get your head around, plus a year-end wrap-up that replaces the old annual return.

The three core changes

  1. Quarterly updates. Instead of one tax return a year, you send HMRC a summary of your income and expenses four times a year.
  2. Reporting per income stream. Self-employment and property are reported separately. If you run a trade and also rent out a property, that is two sets of updates per quarter.
  3. Digital record keeping. You can no longer file directly on the HMRC website the way you used to. You have to keep digital records and submit through approved software or an accountant.

At the end of the year you submit a Final Declaration. This pulls the whole year together and replaces the Self Assessment return you will have filed every January until now.

Part of a bigger shift

None of this came out of nowhere. Making Tax Digital is HMRC's long-running plan to move tax online, first set out back in 2016. VAT went first, and keeping digital VAT records and filing through software has been compulsory for VAT-registered businesses since 2019. Income Tax for the self-employed and landlords is simply the next big phase of the same programme.

It does not apply to everything. Making Tax Digital does not cover corporation tax, so limited companies are outside this round, and it does not change Income Tax for people whose only income is a wage or a pension. For now it is aimed squarely at sole traders and landlords above the income thresholds.

Key dates for the first phase (2026/27)

  • 6 April 2026 - Making Tax Digital for Income Tax went live.
  • 7 August 2026 - First quarterly update due, covering 6 April to 5 July 2026.
  • 7 November, 7 February, 7 May - The three remaining quarterly updates.
  • 31 January 2028 - Final Declaration for the 2026/27 tax year.

One thing that catches people out: this changes how and how often you report, but it does not change when you pay. Your tax payment dates of 31 January and 31 July stay exactly as they are.

It sounds like a lot, and it is a real change, but the underlying work is much the same as before. You are chunking a once-a-year job into quarters. If the thought of doing that four times a year fills you with dread, that is exactly the point at which an accountant earns their keep. Mazuma, our partner on this series, can run the whole thing for you on a fixed monthly fee.

Public and Employers’ Liability Insurance Explained

Key differences between the two:

Public Liability Insurance
Employer’s Liability Insurace

Covers injury or damage to the public.

Covers injury or illness to employees.

Not legally required.

Legally required with staff.

Common for customer-facing businesses.

Required for any business with staff.