For any freelancer in the UK, it’s important you’re made aware of Making Tax Digital for Income Tax. It’s a digital process that will significantly alter UK freelancing by replacing annual Self-Assessment with mandatory digital, record-keeping.

Starting from the 6th April 2026, self-employed individuals as well as landlord with qualifying income over £50,000 will need to report to this system with MTD-compatiable software. These thresholds will drop to £30,000 in 2027 and £20,000 in 2027.

In this guide, we’ll look at the key changes worth knowing for freelancers and how to get ready for the change so that you don’t incur any unwanted penalties as a result.

Key changes freelancers must be made aware of

There are a number of key changes that freelancers should be made aware of. These will help ensure you remain compliant.

Quarterly updates

Instead of the one annual tax return, freelancers will need to submit summaries of income and expenses four times a year. That will require a lot more organisation on the freelancer’s part, which many will not be used to and will have to adjust their efforts accordingly.

Digital record keeping

When it comes to digital record keeping, handwritten records are no longer acceptable. You must be using compatible software to track your transactions. 

Photo by <a href="https://unsplash.com/@martafilipczyk?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Marta Filipczyk</a> on <a href="https://unsplash.com/photos/person-using-macbook-pro-on-bed-0JgvkiOpIYk?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Unsplash</a>
Photo by Marta Filipczyk on Unsplash

Deadlines

Quarterly updates will generally be due within one month of the quarter end and you’ll also need to submit an End of Period Statement and final declaration by 31st January the following year.

Immediate tax view

The system will provide a real-time, estimated tax liability, which allows for better and more frequent budgeting as a result.

How to prepare ahead of time as a freelancer 

In order to prepare for Making Tax Digital for Income Tax, it’s always good to prepare ahead of time, rather than to leave it until the last minute. By being proactive, you’ll be able to make the transition a lot easier.

  1. Check your eligible

First and foremost, you’ll want to check your eligibility. This can be done via the GOV.uk website and it’s something to check to avoid joining too early when it’s not necessary.

As a recap, if you’re earning over £50,000, you’ll be required to start from 6th April 2026. For those earning over £30,000 by 6th April 2027, that’s when you’ll start. For those earning £20,000, joining will commence from 6th April 2028.

It’s therefore expected for most self-employed people to be using a digital system by 2028, onwards.

  1. Start using MTD-compatiable software now

It’s beneficial to start using MTD-compatiable software now, rather than attempting to use it from the year you’re shifting over to the digital system. By using whatever appropriate software now, you’ll be able to get used to this new way of tracking your income and expenses so it’s not so much of a shock to the system moving forward.

  1. Get professional help and guidance where required

Finally, if you’re finding it difficult to manage and need help, then you can always get professional help from an accountant who will be able to manage all this for you for a fee.

Making Tax Digital for Income Tax will change the way you bookkeep as a freelancer in the UK, so knowledge is power.