Making Tax Digital,
explained.

If you're self-employed in the UK, the way you handle tax is about to change.

What it is

Making Tax Digital is HMRC's plan to move tax record-keeping and reporting online. For freelancers and sole traders, the relevant scheme is Making Tax Digital for Income Tax.

Under it, you keep digital records, send HMRC an update every quarter, and submit one final declaration after the tax year ends. It replaces the annual Self Assessment return.

Who it affects, and when

It applies based on your gross income, before expenses.

From April 2026: income over £50,000.
From April 2027: income over £30,000.
From April 2028: income over £20,000 (planned).

The figure is your total income from self-employment and property. It is not your profit.

Why HMRC is doing it

The aim is more accurate records, reported through the year rather than once at the end.

What changes for you

You keep digital records as you go. You send four quarterly updates. You submit a final declaration after the tax year ends.

Paper records and standalone spreadsheets do not meet the requirement. HMRC requires records kept in compatible software that reports to them directly.

What to do

Check your income against the thresholds.

Start keeping digital records now.

Choose MTD-compatible software before your start date.

Where FreelanceOS fits

FreelanceOS keeps your records in the format HMRC requires. Upload your bank statement and income and expenses reconcile through the year, each filed into HMRC's categories. Flo keeps a running estimate of the tax you owe.

We are completing HMRC recognition. FreelanceOS gets you MTD-ready ahead of your deadline.

Making Tax Digital is mandatory once you cross the threshold. Preparing early keeps it simple.