For local businesses, Making Tax Digital Northampton is the government’s initiative to modernise the tax system, requiring you to keep digital records of your income and expenses and submit tax information to HMRC using approved software. It aims to make tax reporting more efficient and reduce errors.
When does MTD for Income Tax Self Assessment start?
Making Tax Digital Northampton will begin its rollout from April 2026. This initial phase will affect sole traders and landlords with an annual income exceeding £50,000. The threshold will then drop to £30,000 in 2027.
Do I need special software for Making Tax Digital?
Yes, you will need MTD-compatible software to comply. This typically means cloud-based accounting platforms that allow you to record transactions digitally, categorise them, and submit your returns directly to HMRC. Spreadsheets and paper ledgers will no longer be sufficient.
How will MTD change my tax reporting routine?
Instead of a single annual Self-Assessment tax return, you will need to submit quarterly summaries of your income and expenditure to HMRC using Making Tax Digital-compatible software. You will also submit an end-of-period statement and a final declaration after the tax year ends.
Next steps…
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