MTD for Income Tax Survival Playbook (2026)
HMRC delayed Making Tax Digital for Income Tax Self Assessment (ITSA) until April 2026, but that just means you have a short runway to rewire bookkeeping. Trades earning £50k+ from self-employed work or rental properties must send four digital updates plus a final declaration every year. Here’s how to simplify that workflow with Toolfy.
4.2m taxpayers
Enter MTD in 2026
HMRC policy paper, Dec 2023
£50k threshold
Phase 1 (2026)
MTD ITSA timetable
4 digital updates
Per tax year
HMRC MTD regulations (SI 2021/1076)
⚠️ Not Tax or Accounting Advice
This guide is for informational purposes only and does not constitute tax advice, accounting advice, or professional financial services. Tax laws, allowances, and HMRC requirements change frequently.
Before making any tax decisions or filing returns: Consult a qualified accountant or tax advisor who can review your specific circumstances. What's mentioned here may not apply to your situation, and regulations may have changed since publication.
Official source: HMRC (gov.uk/hmrc)
MTD timeline + thresholds
HMRC’s December 2023 policy paper reconfirmed the staggered rollout. If you earn above the threshold across all sole-trader businesses or UK property income, the clock starts April 2026.
| Audience | Start date | Requirement |
|---|---|---|
| £50k+ turnover | April 2026 | Join MTD, send quarterly updates and final declaration digitally |
| £30k-£50k turnover | April 2027 | Same obligations 12 months later |
| Partnerships | TBC (earliest 2027/28) | Await HMRC timetable; start digital prep anyway |
Digital record workflow
HMRC doesn’t care which app you use—it cares that every sale/expense is recorded digitally, preserved for six years, and can be exported into quarterly updates. Toolfy already holds your invoices, payments, and job costs. Use automations to pipe that into your accounting system.
Income
- Every Toolfy invoice auto-syncs with accounting software (Xero, QuickBooks).
- Split deposits vs final bills so quarterly updates show accurate turnover.
- Match payments (card, bank transfer, cash) via bank feed rules.
Expenses
- Upload receipts + supplier invoices via the Toolfy mobile app.
- Use categories (fuel, materials, subcontractors) that map to HMRC boxes.
- Approve expenses weekly so nothing piles up before the quarter end.
Evidence
- Store CIS statements, mileage logs, and grant paperwork in a dedicated folder.
- Apply retention tags (6 years) to stay audit-ready.
- Share read-only links with your accountant instead of emailing ZIP files.
Quarterly update playbook
HMRC expects four digital updates plus a final declaration. Use this cadence to stay sane.
Week 1-4 after quarter end
- • Reconcile Toolfy jobs vs bank receipts
- • Classify expenses and attach missing receipts
- • Check CIS suffered vs deducted for subcontractors
Week 5
- • Accountant review + adjustments
- • Submit quarterly update via MTD software
- • Log confirmation reference inside Toolfy
Interactive MTD readiness checklist
Make quarterly updates boring
Toolfy keeps your invoices, receipts, and CIS data neat so accountants submit MTD updates in minutes and you stay focused on jobs.
Related Articles
VAT Registration Guide for Trade Businesses (2026)
Timing strategies plus MTD-ready software tips.
Tax Deduction Checklist for UK Trades (2026)
Claim every allowable cost with Toolfy tags.
How to Handle VAT Inspection Without Panicking
Audit-ready documentation and scheduling workflows.
⚠️ Important Disclaimer
This guide is for general informational and educational purposes only. It does not constitute professional advice of any kind (legal, financial, tax, insurance, or otherwise).
Before making business decisions: Consult with qualified professionals (solicitors, accountants, insurance brokers, etc.) who can assess your specific circumstances. Laws, regulations, and industry standards change frequently and vary by location and situation.
Toolfy and the article authors accept no liability for decisions made or actions taken based on information provided in this guide. You are solely responsible for ensuring compliance with all applicable laws and regulations.