Making Tax Digital
HMRC is changing how self-employed people report tax
From April 2026, quarterly digital reporting replaces the annual Self Assessment return for many freelancers and sole traders.
What is Making Tax Digital?
Making Tax Digital (MTD) is HMRC's programme to modernise the UK tax system. Rather than filing a single annual Self Assessment return, self-employed individuals and landlords will be required to keep digital records and submit quarterly updates directly to HMRC using HMRC-recognised software.
MTD for Income Tax Self Assessment (MTD for ITSA) is one of the biggest changes to tax reporting for the self-employed in decades. If you're a freelancer, sole trader, contractor or landlord, it is likely to affect you.
Who does it apply to, and when?
MTD is being rolled out in phases based on your gross qualifying income from self-employment and property combined:
From 6 April 2026
Gross qualifying income over £50,000
From 6 April 2027
Gross qualifying income over £30,000
From 6 April 2028
Gross qualifying income over £20,000
HMRC determines your qualifying income based on your most recent Self Assessment return. Payment deadlines remain unchanged under MTD.
What does compliance actually mean?
Once MTD applies to you, you'll need to:
- Keep digital records of all income and expenses using HMRC-recognised software
- Submit a quarterly update to HMRC summarising your income and expenses
- Submit a final end-of-year declaration confirming your figures
Quarterly submissions are not tax payments — they're updates that give HMRC a running picture of your finances. Your tax bill is still settled at the usual time.
How Azawa helps
Azawa is designed for freelancers and event professionals managing their own finances. MTD compliance is built in, not bolted on.
- Digital record-keeping for income and expenses that meets HMRC requirements
- Receipt scanning to cut down on manual data entry
- Invoicing with sequential, HMRC-compliant numbering
- Direct MTD submission to HMRC via our recognised software integration
- A full digital audit trail from transaction to submission
What if I'm not sure whether I'm affected?
Check your 2024/25 Self Assessment return. If your gross income from self-employment or property exceeded £50,000, you are required to comply from April 2026. If you're unsure, speak to a qualified accountant or contact HMRC directly. Azawa does not provide tax advice.