MTD is here. If your turnover from self-employment and/or property income is more than £50,000, you need to start using it now.
Staging dates:
turnover above £50,000 p/a: 6 April 2026
turnover above £30,000 p/a: 6 April 2027
turnover above £20,000 p/a: 6 April 2028
What is it?
MTD is a tequirement to keep digital accounting records and submit quarterly returns. You're already doing it if you are VAT registered but this new wave applies to income tax returns for the self-employed and landlords - instead of one annual return, you will need to start doing them quarterly. If you are both self-employed and a landlord, your combined turnover determines when you need to start.
Does Xero do it?
Yes. Xero is one of many options that will allow you to submit your quarterly returns.
When do returns need to be filed?
You need to submit by one month and seven days following the end of the month the quarter ends - e.g. your first period is 6 April to 6 June, you must submit by 7 August.
You can align your periods with the tax year (6 April to 5 April), with calendar months (1 April to 31 March).
Gov.uk: How and when to send quarterly updates and what’s included in them.
Is there still an annual return?
Yes. This is where you can make sure everything is correct and make adjustments if necessary.
Gov.uk: How and when to make adjustments before you submit your tax return