Making Tax Digital in Cornwall is changing how many sole traders and landlords report income to HMRC — and the key is getting structured early.
Under MTD for Income Tax, affected businesses must keep digital records and submit quarterly updates instead of relying solely on an annual return. Harbour provides practical setup and ongoing support so your systems, reporting and tax position are structured correctly from the start.
What is Making Tax Digital?
MTD is part of HMRC’s plan to modernise the UK tax system. In plain English: you keep records digitally and send updates to HMRC using compatible software (rather than doing everything in one annual rush).
MTD applies to:
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MTD for VAT (already live for VAT-registered businesses)
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MTD for Income Tax (Income Tax Self Assessment) for sole traders and landlords, being phased in from 2026.
MTD for Income Tax (phased rollout)
You’ll need to use MTD for Income Tax if your combined income from self-employment and property is over the threshold HMRC sets (HMRC call this “qualifying income”).
Planned rollout:
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From 6 April 2026: over £50,000
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From 6 April 2027: over £30,000
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From April 2028: over £20,000 (planned)
If you’re not sure where you sit, we can help you sanity-check it quickly and set a clean plan.
What you’ll need to do under MTD for Income Tax
If you’re in-scope, you’ll need software that works with MTD to:
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Create and keep digital records of income and expenses
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Send quarterly updates to HMRC
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Submit your year-end info and pay tax due by 31 January after the tax year
This is why “just keeping a spreadsheet” starts to become fragile — you’re moving to multiple submissions and cumulative reporting. (Spreadsheets can still play a part for some VAT setups, but it gets trickier for Income Tax.)
The simple route: get set up on Xero properly
Xero is HMRC-recognised for MTD and is built to keep your records, automate the day-to-day admin, and support compliant submissions without juggling multiple tools.
What this looks like in practice:
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Bank feeds connected so transactions flow in automatically
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Rules and reconciliation set up so coding stays consistent
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Dashboards that make your numbers readable (and accountant-friendly)
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A simple monthly habit so quarterly updates don’t become painful
Choose the level of support you want
Frequently Asked Questions
MTD for Income Tax changes how sole traders and landlords keep records and report income to HMRC. It requires digital records and quarterly updates, followed by an end-of-year final submission through compatible software.
If your qualifying income is:
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Over £50,000: MTD starts 6 April 2026
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Over £30,000: starts 6 April 2027
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Over £20,000: starts 6 April 2028
MTD applies to qualifying income from self-employment and/or property (landlords), based on HMRC’s rules. If you’re unsure, HMRC provides an eligibility checker and guidance.
You’ll need to:
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keep digital records
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submit quarterly updates
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complete an end-of-year final declaration (instead of only “catching up” once a year).
Not necessarily — you must use HMRC-compatible software. Xero is one option many owners choose because it helps keep records tidy and supports the required submissions. HMRC lists compatible software.
MTD for Income Tax applies to sole traders and landlords, not limited companies. (MTD for VAT already exists; corporation tax has separate future plans
Quarterly updates are generally due one month after each quarter end (e.g., for the quarter starting 6 April 2026, the first update is due 7 August 2026). HMRC’s campaign site publishes a clear timeline.
