Here at Wilson Wraight, we are exploring what Making Tax Digital for Income Tax will mean for our business and our clients when it is implemented on the 6^th April 2026.

In just over 12 months HMRC are introducing mandatory quarterly, digital updates for Sole Traders and Landlords with an income of over £50,000 per year.  This £50,000 figure is based on an actual annual income figure, not an annual profit figure.  The income figure also does not include income from dividends, PAYE employment, or bank interest.

In April 2027 this mandatory threshold figure will be reduced to £30,000 per year with a further reduction to £20,000 per year by the end of this current parliament.

As a team we are looking through the clients we currently bookkeep for, and identifying those these changes will affect.

We are already in a strong position to be compliant with MTD IT. We already use digital software for all our bookkeeping clients, as Making Tax Digital for VAT became law for businesses in 2019. This required VAT Registered businesses to keep records digitally and submit VAT returns through MTD compatible software.

To aid our business further, this year we are moving many of our clients to Xero cloud accounting software.  There are so many benefits to this move for the team, the client, and other agencies who use this accounting data.

• The cloud nature of the software allows a live view of bookkeeping for all those who have relevant permission to see the platform.
• The software has the capability to link directly to a client’s bank account for the purpose of viewing bank transactions.
• Purchase invoices can be emailed directly to the software, and Xero learns how to post them to the accounts based on previous inputs.
• Xero stores a digital copy of the invoice along with the posting, removing the need for files of printed papers.
• A further bonus is that Xero is compliant with MTD for Income Tax.

You may be now thinking, “Does this MTD for IT affect me?’, ‘What happens next?’

Within the next few months your Wilson Wraight bookkeeper will be in touch to explain the options available. However, if you have any questions, please do contact us.

T: 01284 700727

E: advice@wilsonwraight.co.uk