Making Tax Digital for Income Tax: a simple guide to getting started

Making Tax Digital for Income Tax (MTD IT) changes how many self-employed people and those with property income report their income and expenses to HMRC. Getting set up doesn’t need to be complicated. This quick guide walks you through what to do, step by step.

First, what is MTD IT?

MTD IT is a new way of reporting your income to HMRC. Instead of one annual tax return, you will:

  • keep digital records of your income and expenses
  • send quarterly (year-to-date) updates of your income and expenses to HMRC
  • submit a final declaration at the end of the tax year

It’s essentially a shift to reporting little and often, rather than everything in one go.

Step 1: Check if it applies to you

From April 2026, MTD IT applies if your total income from self-employment and/or property is over £50,000. If that’s you, you’ll need to follow the new rules from the 2026/27 tax year.

People with income over £30,000 from self-employment and/or property will need to join MTD IT from April 2027. You can, however, volunteer to join early and get familiar with it before your mandatory deadline.

Step 2: Sign up with HMRC

You’ll need to register for MTD IT with HMRC before you can start. To do this, you’ll need:

  1. your HMRC login details
  2. your National Insurance number, which is available to view on your HMRC account.

Step 3: Choose your software

You must use HMRC-recognised MTD IT software to submit your updates.

TaxNav is designed to keep things simple:

  • use it on your phone, tablet or computer
  • record income and expenses directly, or
  • continue using your existing spreadsheet and submit to HMRC through our software

With TaxNav you don’t have to change the way you work to comply with MTD IT. We keep things simple, and you can try our software for free for 30 days and get set up quickly.

Watch our onboarding video for more information. Further how-to videos on different aspects of MTD IT are freely available on our YouTube channel.

Step 4: Decide how you’ll keep records

Digital record-keeping doesn’t mean scanning every receipt. It simply means keeping your income and expenses recorded digitally as you go, for example:

  • in a spreadsheet using TaxNav
  • or directly into our software

Keeping things up to date, little and often, makes everything else much easier.

Step 5: Set your quarterly update dates

You’ll send four updates each year to HMRC. These are simple summaries of your income and expenses to date. Typical deadlines are:

7 August

7 November

7 February

7 May

There’s no tax to pay at this stage. These updates are just to keep HMRC informed. Don’t worry, TaxNav will email you reminders of the upcoming due dates throughout the year.

Step 6: Start recording your income and expenses

Once you’re set up, you can start recording your income and expenses digitally.

This can be as simple as keeping your records up to date in a spreadsheet or entering them directly into your software. The key is to keep things updated little and often, rather than leaving it all until the deadline.

We have a range of helpful videos here or you can take a look at this article for a simple explanation of what digital record-keeping means in practice.

Step 7: Submit your first update

Submit your first quarterly update through your MTD IT software. This is a summary of your income and expenses for the period, rather than a detailed breakdown. TaxNav will automatically summarise all the details for you.

After that, you’ll repeat the process each quarter. The updates are cumulative (year-to-date), so each one builds on the last.

There’s no tax to pay at this stage. The updates are there to keep HMRC informed and help you stay on track. If you miss something, you can correct it in your next update, so it doesn’t have to be perfect first time.

Step 8: Complete your final declaration

At the end of the tax year, you’ll submit a final declaration (replacing your Self Assessment return). This pulls everything together, including your quarterly updates, any other income, and any allowances or adjustments. The deadline remains 31 January, just as it does now.

If you’re getting started late

If you haven’t started yet, don’t panic. Focus on the basics:

  1. Check you’re in scope
  2. Sign up with HMRC
  3. Choose your software
  4. Start keeping digital records

Once those are in place, everything else follows naturally.

Keep it simple

MTD IT doesn’t need to mean a complete overhaul or extra stress. With the right approach and the right software, it becomes:

  • straightforward to manage
  • easy to keep on top of
  • and far less of a last-minute rush ‍

TaxNav is designed to make MTD IT simple, affordable, and easy to fit around your working life. An annual subscription costs £60+VAT, or a monthly pay-as-you-go plan is £6+VAT. You automatically get a 30-day free trial of our software.

‍

Get started with MTD IT with TaxNav

‍