For many self-employed workers, the January Income Tax bill has a particular sting. Not only is payment due shortly after Christmas, when we have typically spent more than usual, it also tends to be the higher of the two payments required. If you’re busy throughout the year and tend to leave your Self-Assessment until January, the bill can come as a shock. However, for individuals across the country, 2026 can mark a change – one where an unpredictable January payment becomes a thing of the past.
MTD for Income Tax
On 6 April 2026, around 780,000 sole traders and landlords with a gross income of £50,000 or more will be required to comply with Making Tax Digital (MTD) for Income Tax. This means they must maintain accurate, up-to-date records of income and expenses, and report them to HMRC every quarter. After the fourth quarterly update, a final declaration must be made to confirm the accuracy of the information provided throughout the year.
While payment of Income Tax will still be due on 31 January, the rollout of MTD for Income Tax means that it will be a more predictable bill that self-employed workers and landlords can plan and save for.
How accounting software can help
With the right accounting software, your taxable income is visible throughout the tax year, helping you to better understand your liabilities. This enables you to plan with greater certainty and minimise the impact on your cashflow. You’ll benefit from:
- Real-time visibility of your tax position
- More accurate predictions of your tax liability
- Better cashflow management
These three advantages combine to ensure your tax bill doesn’t come as a surprise. It offers the ability to plan and save for tax bills across the year, rather than having to scrape together the funds at the last minute or apply for a Time to Pay arrangement.
Giving you a better handle on your accounts
Accounting software has made accounting tasks simpler for many small business owners, contractors and self-employed workers. It simplifies the creation and distribution of invoices, automates certain functions such as payment reminders, and helps to reduce bookkeeping errors. What’s more, the software can be linked to a business credit card or bank account, meaning income and expenses are automatically recorded after they reach or leave your account. All this helps you to cut down on admin time.
Avoid the tax sting in 2026
While only self-employed individuals and landlords earning over £50,000 are required to register for MTD for Income Tax in April 2026, many more can register voluntarily and reap the benefits. With the help of compliant accounting software and a professional accountant, you can enjoy regular updates on your tax obligations, avoiding last minute guesswork or panic. You’ll also have an expert to advise you on cash flow and forecasting, as well as someone to file your quarterly HMRC reports and your end of year declaration.
The right help can not only make your financial obligations easier, it can help your business to grow. Speak to a reputable accountant today to take the next step.
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