Making Tax Digital for Income Tax went live on 6 April 2026. If you are a sole trader or landlord with gross income above £50,000, you are now required to keep digital records and submit quarterly updates to HMRC using compatible software. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
Every accountancy firm in the country has written about the tax side. What almost nobody is covering is the IT infrastructure side. MTD does not just require new software. It requires reliable broadband, secure file storage, compatible devices, proper backup, and an email setup that can handle sensitive financial data safely. If you currently rely on a personal laptop, a free email account and a filing cabinet, use MTD as the trigger to sort out your IT setup.
What MTD Requires From Your IT
HMRC requires three things: digital record-keeping using compatible software, quarterly submissions via a digital link to HMRC, and a year-end tax return filed through the same system. Paper records alone are no longer sufficient.
In practice, this means you need software that is MTD-compatible, HMRC maintains a list of approved providers, a device that can run that software reliably, an internet connection stable enough to submit quarterly without disruption, and a way to store financial records digitally and securely.
If you are using a spreadsheet for record-keeping, you also need bridging software that creates the digital link to HMRC. The spreadsheet itself does not connect directly.
The IT Checklist Your Accountant Will Not Give You
Your accountant will help you choose MTD-compatible software and set up quarterly reporting. They are unlikely to check whether your IT setup can support it. That is where the gaps appear.
Reliable broadband. Quarterly submissions have fixed deadlines, 7th of the month after each quarter end. If your broadband drops out on submission day, you risk penalty points. If you work from multiple sites or from home, check that every location has sufficient connectivity. Businesses still running on legacy broadband should consider whether SoGEA or a dedicated business line is more appropriate.
A device that is current and secure. MTD software runs on laptops, desktops and in some cases tablets. The device needs to be running a supported operating systemwith current security updates. A Windows 10 machine past end of support, without ESU, is an unpatched device handling financial data. That is a risk to your records and a red flag if HMRC or your insurer ever asks questions.
Secure file storage. Digital records need to be stored securely and accessibly. A folder on your desktop is not secure storage. Cloud storage through Microsoft 365, OneDrive or SharePoint, with appropriate sensitivity labels and access controls gives you secure, backed-up, accessible storage that meets the spirit of digital record-keeping.
Email security. You will exchange financial information with your accountant, HMRC and potentially clients via email. If you are using a free personal email account, Gmail, Yahoo, Outlook.com, for business correspondence containing National Insurance numbers, income figures and tax records, you have no control over data protection, no audit trail, and no recourse if the account is compromised. A business email account with MFA enforced is the minimum standard.
Backup. HMRC expects you to maintain digital records for at least five years. If your device fails, is stolen, or is hit by ransomware, those records need to be recoverable. A proper backup strategy covering your financial records, whether stored locally or in the cloud, is essential. If you have never tested a restore, now is the time.
What Happens If You Are Not Ready
HMRC has confirmed a soft landing for the first year. HMRC will not apply penalty points for late quarterly submissions to the April 2026 cohort during 2026/27.But this grace period does not extend to late tax returns, due 31 January 2028 for the 2026/27 year, or late payments.
From 2027/28 onwards, the penalty regime applies in full. Each missed quarterly deadline earns a penalty point. Four points within two years triggers a £200 fine. Late payments attract escalating penalties from day 16 after the due date.
The grace period is time to get your systems right, not time to ignore the requirement.
MTD Is a Trigger, Not Just a Tax Change
For many sole traders, landlords and small partnerships, MTD is the first time their IT setup faces formal external requirements. It forces questions that should have been asked earlier: is my data backed up? Is my device secure? Am I storing financial records in a way that is accessible, auditable and protected?
If the answer to any of those is unclear, MTD is the trigger to fix it. Businesses that treat this as both an IT project and a tax project will strengthen their position for HMRC compliance, insurance renewals, client confidence and day-to-day resilience.
Get Your IT MTD-Ready
If you are not sure whether your current setup supports MTD, or you want help putting the right infrastructure in place, contact The Unite Group. We help businesses across the North East with managed IT services that cover secure email, cloud storage, device management, backup and broadband, everything MTD demands from your IT, handled properly.