Making Tax Digital for Income Tax in Coventry & Warwickshire

Making Tax Digital for Income Tax is now mandatory for many sole traders and landlords.

If your 2024/25 Self Assessment tax return showed qualifying income of more than £50,000, and you are not exempt, you need to use Making Tax Digital for Income Tax from 6 April 2026.

InChart Accounting Limited provides practical MTD Income Tax support for sole traders and landlords in Coventry and Warwickshire.

We can help you understand when MTD applies to you, set up compatible accounting software, maintain digital records, prepare and submit quarterly updates, and complete your annual Self Assessment tax return using compatible software.

Whether MTD already applies to you or you are preparing for the lower income thresholds being introduced from April 2027 and April 2028, we can help you put the right bookkeeping and reporting system in place before your deadlines arrive.

Do You Need to Use Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is being introduced in stages according to your qualifying income.

You will normally need to use MTD for Income Tax from:

6 April 2026
If your qualifying income for the 2024/25 tax year was more than £50,000.

6 April 2027
If your qualifying income for the 2025/26 tax year is more than £30,000.

6 April 2028
If your qualifying income for the 2026/27 tax year is more than £20,000.

Qualifying income is broadly your total income from self-employment and property before expenses, often referred to as turnover.

If you have more than one self-employed business or receive both self-employment and property income, the relevant amounts are added together when determining your qualifying income.

Other income, such as employment income taxed through PAYE, dividends, pensions and your share of partnership profits, does not normally count towards the MTD qualifying income threshold.

If you are unsure whether Making Tax Digital applies to you, InChart Accounting can review your circumstances and help establish when you need to start.

What Changes Under MTD for Income Tax?

Making Tax Digital changes the way sole traders and landlords within the rules maintain records and report information to HMRC.

You will normally need to:

• keep the required self-employment and property records digitally

• use MTD-compatible software

• keep your digital records up to date

• send quarterly updates to HMRC

• review and correct your information where necessary

• complete and submit your annual tax return using compatible software

Quarterly updates are generated from the digital records maintained in your accounting software.

They provide HMRC with information about your self-employment or property income and expenses throughout the year.

They are not separate tax returns.

Quarterly updates are also cumulative. Each update normally covers information from the beginning of the tax year to the end of the relevant update period.

Making Tax Digital does not mean that you pay Income Tax every three months. Your usual Self Assessment payment dates continue to apply.

MTD Income Tax Quarterly Deadlines for 2026/27

For taxpayers using the standard quarterly update periods, the deadlines for the 2026/27 tax year are:

7 August 2026 – first quarterly update

7 November 2026 – second quarterly update

7 February 2027 – third quarterly update

7 May 2027 – fourth quarterly update

Your annual Self Assessment tax return for 2026/27 must normally be submitted by 31 January 2028.

HMRC will not apply late-submission penalty points for missed quarterly update deadlines during the 2026/27 tax year.

However, this does not remove your responsibility to keep the required digital records or submit the quarterly information.

Outstanding quarterly updates will need to be submitted before you can submit your annual tax return.

Penalty rules can still apply if your annual tax return is submitted late or tax is paid late.

The first year therefore gives taxpayers some additional flexibility while becoming familiar with MTD, but it should not be treated as a reason to delay setting up proper digital bookkeeping.

Our MTD Income Tax Service

InChart Accounting can manage the ongoing Making Tax Digital process for you, helping you deal with the additional record-keeping and reporting requirements without unnecessary administration.

Our MTD Income Tax service can include:

MTD Eligibility Review

We can review your qualifying income and help establish when you are required to start using Making Tax Digital for Income Tax.

This can be particularly useful where you receive income from more than one self-employed business or from both self-employment and property.

MTD-Compatible Software Setup

We can help you choose and configure suitable accounting software for your business or property records.

Depending on your circumstances and the functionality required, this may include cloud accounting solutions such as Xero or FreeAgent.

The aim is to create a practical bookkeeping system that meets your reporting requirements without making your accounting unnecessarily complicated.

Digital Bookkeeping

We can maintain your income and expense records digitally throughout the year.

Regular bookkeeping helps ensure that the information used for your quarterly updates is organised, complete and easier to review.

Quarterly Updates

We can prepare and submit your required quarterly updates to HMRC using compatible software.

This allows you to concentrate on your business or properties while we help manage the reporting process.

Year-End Review and Adjustments

Quarterly updates do not remove the need to review your records at the end of the tax year.

We can review the information held in your accounting software and make the appropriate year-end adjustments before completing your final tax position.

Annual Self Assessment Tax Return

We can prepare and submit your annual Self Assessment tax return using compatible software.

This can include your self-employment or property figures together with other income, allowances, reliefs and information that needs to be reported.

Ongoing MTD Support

Your circumstances may change during the year.

You might start another business, acquire or dispose of a rental property, change accounting software or begin receiving another source of income.

We can help you understand how those changes affect your Making Tax Digital and Self Assessment obligations.

MTD for Sole Traders

If you are self-employed, Making Tax Digital may change the way you currently manage your bookkeeping.

Businesses that previously relied on paper records, spreadsheets or prepared their accounts only once a year may need to move to a more regular digital bookkeeping process.

InChart Accounting can help sole traders in Coventry and Warwickshire establish a practical system for keeping their accounting records up to date.

Our support can include:

• recording business income and expenses

• maintaining digital bookkeeping records

• reconciling bank transactions

• reviewing business expenditure

• correcting bookkeeping errors

• preparing quarterly updates

• completing the annual Self Assessment tax return

Regular bookkeeping can also give you a clearer picture of how your business is performing throughout the year rather than discovering your financial position only when your annual accounts are prepared.

MTD for Landlords

Landlords can also fall within Making Tax Digital for Income Tax.

If your qualifying property income, either on its own or combined with qualifying self-employment income, exceeds the relevant threshold, you may be required to use MTD.

InChart Accounting can assist landlords with:

• digital property income records

• property expense records

• MTD-compatible accounting software

• quarterly updates

• year-end adjustments

• annual Self Assessment tax returns

This can be particularly helpful if you have several rental properties or receive both rental income and self-employment income.

We can help organise your records throughout the year instead of leaving the bookkeeping until shortly before the Self Assessment deadline.

What if You Have More Than One Business or Source of Income?

Your qualifying income can include income from more than one self-employed business as well as qualifying property income.

For example, you might have:

• one self-employed business and a rental property

• two separate self-employed trades

• several rental properties

• a combination of self-employment and property income

These amounts can be combined when determining whether your qualifying income exceeds the relevant MTD threshold.

You could therefore fall within Making Tax Digital even if none of your individual businesses or property activities exceeds the threshold on its own.

However, not every type of income counts towards the MTD qualifying income test.

Income such as PAYE employment, dividends, pensions and your individual share of partnership profits is not normally included when calculating qualifying income.

InChart Accounting can review your income sources and help establish your MTD position.

Could You Be Exempt From MTD?

Some taxpayers are exempt from Making Tax Digital for Income Tax.

Certain exemptions apply automatically, while others require an application to HMRC.

For example, an exemption may be available where a taxpayer is digitally excluded and it is not reasonable for them to use the required digital systems.

There are also specific automatic exemptions that can apply depending on a taxpayer's circumstances.

Being exempt from Making Tax Digital does not normally remove the requirement to submit a Self Assessment tax return.

If you believe an exemption may apply to you, we can discuss your circumstances and help you understand the relevant HMRC process.

Why Prepare for MTD Before Your Deadline?

Waiting until your first quarterly deadline can create unnecessary pressure.

Before you begin using MTD, you may need to:

• confirm when the rules apply to you

• check whether an exemption applies

• choose compatible accounting software

• authorise your software to communicate with HMRC

• organise your business or property records

• transfer existing bookkeeping information

• establish a regular bookkeeping process

• correct incomplete or inaccurate records

Setting everything up in advance gives you time to identify problems before your first reporting deadline.

It also makes the transition from annual bookkeeping to regular digital record keeping considerably easier.

Local MTD Income Tax Support in Coventry & Warwickshire

InChart Accounting Limited provides MTD Income Tax, bookkeeping and Self Assessment support to sole traders, landlords and small businesses across Coventry and Warwickshire.

We work with clients in areas including:

Coventry
Warwick
Royal Leamington Spa
Kenilworth
Rugby
Nuneaton
and surrounding areas across Warwickshire and the West Midlands.

Our services can also be provided remotely using cloud accounting software, telephone, email and secure digital systems.

You do not need to visit an accountant every time your records need updating or an MTD submission becomes due.

Whether you need ongoing bookkeeping and MTD support or simply want help setting up the correct system, we can tailor our service to your circumstances.

MTD Income Tax FAQ

What Is Qualifying Income for MTD Income Tax?

Qualifying income is broadly your total income from self-employment and property before expenses.

It can include income from more than one self-employed business or property source.

Income from PAYE employment, dividends, pensions and an individual's share of partnership profits does not normally count towards the qualifying income threshold.

When Does MTD Income Tax Become Compulsory?

If your qualifying income for 2024/25 was more than £50,000, you normally need to use MTD from 6 April 2026.

If your qualifying income for 2025/26 is more than £30,000, you normally need to use MTD from 6 April 2027.

If your qualifying income for 2026/27 is more than £20,000, you normally need to use MTD from 6 April 2028.

Exemptions can apply in certain circumstances.

Do Landlords Have to Use Making Tax Digital?

Landlords can be required to use MTD for Income Tax where their qualifying property income, together with any qualifying self-employment income, exceeds the relevant threshold and no exemption applies.

Do I Still Submit a Tax Return Under MTD?

Yes.

Making Tax Digital introduces digital record keeping and quarterly updates, but you still need to complete and submit an annual Self Assessment tax return.

For tax years in which you are required to use MTD, the return must be completed and submitted using compatible software.

Are Quarterly Updates the Same as Tax Returns?

No.

Quarterly updates are not separate tax returns.

They provide HMRC with information generated from the digital records you maintain for your self-employment or property activity during the year.

Do Quarterly Updates Cover Only Three Months?

Not exactly.

Under the standard MTD update periods, quarterly updates are cumulative.

For example, the second update normally contains information from the beginning of the tax year through to the end of the second update period.

Do Quarterly Updates Mean I Pay Tax Every Three Months?

No.

Making Tax Digital does not change the normal Self Assessment tax payment dates simply because quarterly updates are required.

Can InChart Accounting Submit My Quarterly Updates?

Yes.

We can help maintain your digital bookkeeping records, prepare and submit quarterly updates and complete your annual Self Assessment tax return.

What Happens if I Miss a Quarterly Update in 2026/27?

HMRC will not apply late-submission penalty points for missed quarterly update deadlines during the 2026/27 tax year.

You must still maintain the required digital records and submit outstanding quarterly updates before you can submit your annual tax return.

Penalties can still apply to late annual tax returns and late payment of tax.

When Should I Prepare for MTD if My Income Is Over £30,000?

If your qualifying income for 2025/26 is more than £30,000, you will normally need to use Making Tax Digital from 6 April 2027.

It is advisable to arrange your accounting software and digital bookkeeping process before that date rather than waiting until your first quarterly deadline.

Can I Use Xero or FreeAgent for Making Tax Digital?

You need software that provides the functionality required for Making Tax Digital for Income Tax.

The appropriate software will depend on your circumstances, income sources and the services you require.

We can help you assess your software requirements and set up an appropriate bookkeeping and reporting process.

Can an Accountant Manage Making Tax Digital for Me?

Yes.

An authorised accountant or tax agent can assist with your digital bookkeeping, quarterly updates and annual Self Assessment tax return.

Professional support can be particularly useful where you have several income sources, rental properties or bookkeeping records that require regular review.

Get Ready for Making Tax Digital

If you are a sole trader or landlord in Coventry or Warwickshire and Making Tax Digital applies to you now, or is likely to apply from April 2027 or April 2028, it is important to make sure your records and software are ready.

InChart Accounting Limited can help you:

• establish when MTD applies to you

• review whether an exemption may apply

• organise your digital bookkeeping

• set up compatible accounting software

• maintain your records throughout the year

• prepare and submit quarterly updates

• complete and submit your annual Self Assessment tax return

Do not wait until your next quarterly deadline to discover that your accounting records or software are not ready.

Contact InChart Accounting Limited to arrange an MTD Income Tax review and prepare your records for Making Tax Digital.