Making Tax Digital for Income Tax — What It Means for Self-Employed and Landlords in Northern Ireland
Big changes are coming to the way many people report their income to HMRC.
Under Making Tax Digital (MTD) for Income Tax, self-employed individuals and landlords will need to keep digital records and send updates to HMRC throughout the year instead of just filing one annual tax return.
If you run a small business or have rental income, understanding these changes now will help you avoid stress, extra admin, and potential penalties later.
📊 How Often Will You Need to Report?
Instead of one annual Self Assessment return, you’ll send quarterly updates plus a final declaration each year.
| Stage | What Happens | Deadline |
|---|---|---|
| Quarterly Update 1 | Report income & expenses | August |
| Quarterly Update 2 | Report income & expenses | November |
| Quarterly Update 3 | Report income & expenses | February |
| Quarterly Update 4 | Report income & expenses | May |
| Final Declaration | Confirm full tax position | 31 January |
This means up to five submissions each year, and possibly more if corrections are needed.
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👥 Who Will Be Affected?
MTD is being introduced gradually based on income levels.
| Start Date | Income Threshold |
|---|---|
| April 2026 | Over £50,000 |
| April 2027 | Over £30,000 |
| April 2028 | Over £20,000 |
Over time, millions of taxpayers will fall within the new system.
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⚠️ What Are the Penalties?
Late Filing (Points System)
| Situation | Penalty |
|---|---|
| Late submission | 1 penalty point |
| 4 points reached | £200 fine |
| Further late submissions | £200 each |
| Points reset | After 24 months of compliance |
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Late Payment Penalties
| Delay | Penalty |
|---|---|
| Over 15 days late | 1% of tax owed |
| Over 30 days late | Additional 1% |
| Continued delay | Further penalties possible |
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📉 What This Means in Practice
For many small business owners and landlords, this will mean:
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More frequent reporting
-
Keeping digital records
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Using compatible accounting software
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Less flexibility around deadlines
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Increased risk of penalties if records aren’t up to date
🧾 How to Prepare
You don’t need to wait until the rules start — preparing early will make the transition much easier.
👉 Start keeping digital records
👉 Make sure your bookkeeping is up to date
👉 Check whether your income will fall within the thresholds
👉 Consider moving to accounting software
👉 Speak to your accountant about your options
💼 How Bernard Tierney Accountants Can Help
At Bernard Tierney Accountants, we work with clients across Northern Ireland to prepare for Making Tax Digital.
We can help you:
✔ Set up simple accounting software
✔ Keep your records compliant
✔ Submit updates to HMRC
✔ Avoid penalties
✔ Reduce the stress of the new system
If you’d like to understand how these changes will affect you, get in touch — we’re happy to help.
❓ Frequently Asked Questions
Will Making Tax Digital replace Self Assessment?
Yes — you’ll still submit a final declaration, but you’ll also send quarterly updates during the year.
Do I need special software?
Yes, HMRC requires compatible digital software to keep records and submit updates.
Will everyone need to follow these rules?
No — it depends on your income level, with thresholds being introduced gradually from 2026.
Will I pay tax quarterly?
Not necessarily — quarterly updates are reporting requirements. Payment dates generally remain the same.
What happens if I miss a deadline?
You’ll receive penalty points, and fines apply once you reach the threshold.
📌 Final Thoughts
Making Tax Digital represents a major shift in how income tax is reported. While the goal is to improve accuracy, it will increase reporting requirements and administrative responsibilities for many taxpayers.
Getting organised early and having the right support will make a big difference.
Important Disclaimer
The information published in this article by Bernard Tierney & Company, Accountants & Tax Advisers, is provided for general information and guidance only. It does not constitute professional accounting, taxation, legal or financial advice.
Whilst every reasonable effort is made to ensure accuracy at the date of publication, tax legislation, HMRC guidance and government policies may change. Information in older articles may therefore be out of date.
Individual circumstances vary. Readers should obtain appropriate professional advice before making financial, taxation or business decisions based on this information.
Bernard Tierney & Company accepts no responsibility for losses arising from reliance on this information, to the extent permitted by law. Nothing excludes liability that cannot lawfully be excluded.
Reading this article does not establish an accountant-client relationship.
Need professional advice?
Contact Bernard Tierney & Company:
info@bernardtierney.co.uk