MTD for Income Tax is Coming. Is Your Practice Ready?

From April 2026, your clients face mandatory quarterly reporting under Making Tax Digital for Income Tax. Befree helps accounting practices get ahead, so you’re not scrambling when the deadlines hit.

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MTD for Income Tax Self-Assessment

What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) for Income Tax is HMRC’s biggest shake-up to self-assessment in a generation. It requires sole traders and landlords to keep digital financial records and submit quarterly updates to HMRC, replacing the traditional annual tax return.

For your practice, that means more submissions, more touchpoints with clients, and more pressure on your team – unless you have the right systems in place.

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The MTD Income Tax Rollout - Key Dates for Your Clients

DateWho's in scope
April 2026Clients with a qualifying income over £50,000
April 2027Clients with a qualifying income over £30,000
April 2028Clients with a qualifying income over £20,000

Note for practices: Now is the time to audit your client base. Many of your self-employed and landlord clients will be in scope from April 2026; leaving this late means a painful rush for you and them.

The Real Impact of MTD on Your Workload

MTD for Income Tax isn’t just a client issue – it’s a practice management challenge. Here’s what you’ll be dealing with:

4x the submissions

Quarterly updates for every in-scope client, plus a Final Declaration at year-end

Client data quality

Chasing digital records from clients who still work off spreadsheets or paper receipts

Software migrations

Getting every client onto HMRC-compatible software before their mandatory start date

Deadline pressure

Quarterly cycles mean the clock is always running, with no quiet season

Client communication

Explaining a new system to clients who are used to the annual return rhythm

Capacity planning

Your team will need to handle a significantly higher volume of compliance work

How Befree Supports Your MTD Transition

Befree is built for accounting practices that want to handle MTD at scale without adding headcount or burning out your team.

MTD compliance workflow management

Keep every client’s quarterly submissions on track with automated reminders, deadline dashboards and status tracking across your whole client portfolio.

Client onboarding & software migration

We help you move clients to HMRC-recognised software smoothly, with templates, checklists and a process your team can repeat efficiently at volume.

Digital record-keeping support

No more chasing paper receipts. Befree helps your clients keep clean digital records throughout the year, so quarterly submissions are quick and accurate.

Quarterly update preparation

Streamline the preparation and review of quarterly income and expense summaries, with quality checks built in before anything goes to HMRC.

Final Declaration support

 Manage the year-end Final Declaration process – the replacement for the traditional Self-Assessment return, in one place.

Scalable for any practice size

Whether you have 50 or 5,000 clients in scope, Befree scales with you. No scrambling. No missed deadlines.

What MTD for Income Tax Actually Requires

Each in-scope client must:

Keep digital records

Income and expenses recorded in HMRC-compatible software throughout the year

Submit quarterly updates

A digital summary of business income and expenses sent to HMRC every three months

Complete a Final Declaration

The year-end submission that replaces the Self-Assessment tax return, reconciling all income sources

Your practice is responsible for guiding clients through all three stages.

Don't let MTD catch your practice off guard

The April 2026 deadline is closer than it looks – and the practices that will handle it smoothly are the ones preparing now. Befree gives you the tools, workflows, and support to manage MTD for Income Tax across your entire client base, without the chaos.

Talk to us and breeze through MTD deadlines!
Still have more questions? See FAQs

We Use The Tools You Use

Xero Tax
FreeAgent
VT Transaction
TaxCalc
SageOne
IRIS
IRIS Elements
Dext
CCH
CaseWare
Capium
Sage
QuickBooks
Hubdoc

Spotlight Case Study

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How befree Transformed Tax Planning & Operations for a UK Accounting Firm

Challenges

Rising client demands, costly software subscriptions, and inefficient workflows made it hard for the firm to meet deadlines and focus on tax strategy.

Results

With a dedicated befree team and streamlined systems, 400 jobs were processed efficiently (150 annual accounts, 100 VAT returns). The firm gained accurate insights, smoother operations, and more time for strategic growth.

Testimonial

“Partnering with befree has completely streamlined our operations. Their dedicated team and efficient systems not only improved our turnaround times but also freed us to focus on strategic tax planning and growing our firm.”

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Taxation Outsourcing for a Well-Known Accounting Firm

Challenges

A century-old UK accountancy firm with 50+ staff faced overwhelming data volumes and compliance pressures. They needed a reliable partner to manage taxation processes with accuracy, efficiency, and timeliness.

Results

With a 4-resource dedicated team, befree streamlined workflows, improved compliance, and delivered 500+ jobs (including 375 annual accounts and 150 personal tax returns) within deadlines. The firm gained operational efficiency, scalability, and the freedom to focus on business growth.

Testimonial

“befree has been instrumental in managing our taxation processes with precision and efficiency. Their dedicated team streamlined our workflows, ensured compliance, and gave us the confidence to focus on growing our firm.”

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FAQs on MTD for Income Tax

Does MTD apply to limited companies?
Not for Income Tax. MTD for Income Tax applies to sole traders and landlords only. Limited companies are not currently in scope. However, those that are VAT-registered must comply with MTD for VAT, using compatible software to maintain records and submit VAT returns. Limited companies that are not VAT-registered are not required to follow MTD at this stage. For practical guidance on preparing your clients for what’s ahead, read our 6 Practical Tips Accountants Can Use to Prepare Clients on MTD for Income Tax.

Only if they also have self-employment or property income that exceeds the threshold. Salary and dividends from a limited company alone are not within scope.

Each owner reports their share independently. There is currently an easement allowing income-only quarterly updates, with expenses reported at the End of Period Statement and finalised in the Final Declaration.

Bridging software can allow some continued use of spreadsheets, but it’s not HMRC’s preferred approach and carries a higher compliance risk. We recommend migrating clients to approved software as early as possible.

Xero, QuickBooks, Sage, and a range of other platforms are HMRC-recognised. Befree supports multiple software integrations so you can work with whatever fits your clients best.

HMRC’s points-based penalty system for late submissions applies. Clients receive a penalty point for each missed deadline, with financial penalties triggered once the points threshold is reached. For a full breakdown of how MTD penalties work and how to stay compliant, visit our HMRC Making Tax Digital Guide.

Partnerships are currently excluded from MTD for Income Tax, though HMRC has indicated they are likely to be brought into scope in the future.

Your Clients Are Asking About MTD.

Do You Have the Bandwidth?

From 6 April 2026, over 850,000 sole traders and landlords must file quarterly with HMRC – and many don’t yet have an accountant. That’s an opportunity, but only if your practice has the capacity to take it on.

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No thanks, I'll figure out MTD on my own.