Making Tax Digital: Effective from 6 April 2026

As you should all be aware, MTD for income tax is fast approaching, so we wanted to give you all a reminder on our plans for this and the conversations we should be having with our clients.  

1. Who needs to join and when

MTD for income tax applies to sole traders and landlords whose total gross income from self-employment and/or property exceeds: 

• £50,000 – Need to join from 6 April 2026 
• £30,000 – From 6 April 2027 
• £20,000 – From 6 April 2028 (proposed) 

We’ll review client income from the 2024–25 tax year to determine if and when they are required to join. 

2. What MTD for income tax requires

If you’re within scope, HMRC requires that you: 

1. Keep digital records of income and expenses using MTD-compatible software 
2. Submit quarterly updates to HMRC, summarising income and expenses 
3. Submit a Final Declaration after year-end (replacing the current Self Assessment tax return) 

Quarterly updates are due one month after each quarter ends (e.g. 7 August, 7 November, etc.). 

3. Why we recommend Xero

To help clients meet these requirements, we recommend using Xero, a leading HMRC-recognised cloud accounting platform. Here’s why: 

• Fully MTD compliant – Xero is approved by HMRC for both VAT and Income Tax under MTD.
• Cloud-based – Access to accounts 24/7 from anywhere via laptop or mobile.
• Real-time data – See up-to-date income, expenses, and tax estimates at a glance.
• Quarterly update submission – Xero will generate and submit quarterly updates directly to HMRC.  
• Digital recordkeeping – Store invoices, receipts, and expense records securely in one place.
• Collaboration – Both us and the client can access the account simultaneously. 

Xero simplifies compliance, improves accuracy, and gives real-time insight into the client’s financial position, all in one platform.  

4. What support are we offering to clients 

We’ve split our client support offering into three distinct categories: 

• Do it alone – Client completes the quarterly submissions and keeps their own records up to date. We support them with getting set up and trained on Xero.  
• Do it with me – Client keeps their records up to date and we get involved with review and submission of quarterly returns via Xero.  
• Do it for me – Affinia complete the processing and quarterly returns via Xero on behalf of the client.  

For all of these options, our tax team will complete the final declaration as usual.  

MTD for Income Tax is becoming a legal requirement—and Xero makes the transition not only possible, but painless. It keeps your records accurate, gives better visibility of your tax liabilities, and ensures you stay compliant.