The old way
Every January, millions of self-employed people dig out a year's worth of receipts and spend a stressful few days filing their Self Assessment.
HMRC has decided that system is finished.
So what is Making Tax Digital?
Making Tax Digital (MTD) is HMRC's plan to replace that annual filing ritual with quarterly updates. Think of it less as more admin — and more as spreading the same work across the year.
If you're a sole trader, landlord, or freelancer, you'll report your income and expenses to HMRC four times a year. Each update is cumulative — you're building up a year-to-date picture, not filing four separate returns from scratch. At the end of the year, you submit a single Final Declaration. That's it.
Done right, with the right software, this is actually less stressful than what you're doing now. But only if you're prepared.
Are you affected?
MTD applies to you if your total income from self-employment and/or property exceeds:
£50,000
6 April 2026
£30,000
6 April 2027
£20,000
6 April 2028
These thresholds apply to your combined income from self-employment and property. If you earn above the threshold from any combination of those sources, you're in scope.
Don't wait for a letter. HMRC will write to some taxpayers — the first batch went out in November 2025, the second after January 2026. But compliance is your responsibility. If you earn above the threshold, assume you're affected and act now.
What this looks like in real life
Meet Maya. She runs a small design studio and rents out a flat she inherited.
Under the old system, she filed one tax return every January. Under MTD, she sends four short updates per year for her business, four for the property, and one Final Declaration at the end.
With Otis, the quarterly updates happen automatically as she records income and expenses. The Final Declaration takes minutes, not days.
What does this actually look like?
It depends on how many income sources you have. Here are the three most common situations.
You run one business
Say you're a graphic designer working for yourself. Under MTD, here's your year:
- 4 quarterly updates — cumulative snapshots of your income and expenses. Each one builds on the last. You're not starting from scratch four times.
- 1 Final Declaration at year end. This replaces your old Self Assessment return. Confirm your totals, claim your reliefs, done.
With Otis: the quarterly updates happen automatically as you record income and expenses. The Final Declaration takes minutes.
You run a business and rent out property
Two income sources means two sets of quarterly updates — one for your business, one for your property. But there's still only one Final Declaration.
- 4 quarterly updates for self-employment income.
- 4 quarterly updates for property income.
- 1 Final Declaration to tie it all together.
With Otis: Otis keeps both streams organised. Separate dashboards for Business and Property. Reminders when each update is due. One place for everything.
You run more than one business
HMRC treats each business separately. Plumber by day, online shop owner by night? That's two sets of MTD obligations.
- 4 quarterly updates per business.
- 1 Final Declaration across all income sources.
With Otis: Connect each business once in Otis. Record income and expenses under the right heading. Otis handles the submissions.
Less than 5 minutes to set up
Stop dreading tax time.
Let Otis handle it as you go.
Quarterly updates go out automatically. The Final Declaration takes minutes. No scramble. No surprises.
See how Otis worksDisclaimer
This guide reflects our understanding of MTD legislation at time of publication. It may change and may not apply to your specific circumstances. This is not tax advice — please seek independent guidance if you need it.