MTD for Income Tax: what Brighton freelancers and consultants need to do now

Making Tax Digital for Income Tax (MTD for IT) went live on 6 April 2026. If you are a freelancer, contractor, or consultant earning over £50,000 a year, the way you report your income to HMRC has fundamentally changed — and the consequences of ignoring it are real.

This article is written specifically for Brighton and Hove's self-employed community. It covers what has changed, who it affects, and exactly what you need to do.

What has actually changed?

Previously, self-employed people filed one Self Assessment return each year, covering the previous tax year, with a deadline of 31 January. That system still exists for many people — but for higher earners, it no longer tells the whole story.

Under MTD, you now submit quarterly updates to HMRC in addition to a final end-of-year declaration. Think of it as reporting your income and expenses in four instalments rather than one annual summary.

Does this apply to you?

You are in scope from April 2026 if your qualifying income — that is, gross self-employment income plus any property income, before expenses — exceeded £50,000 in the 2024/25 tax year.

For most Brighton freelancers and consultants operating through a limited company, MTD for Income Tax does not currently apply to the company itself. It applies to you personally if you also have self-employment or property income on top of your salary and dividends. If you are a sole trader, it applies directly.

What do you need to do?

• Switch to MTD-compatible software — Xero, QuickBooks, FreeAgent, and Sage all qualify
• Register with HMRC for MTD for Income Tax (your accountant can do this on your behalf)
• Keep digital records of all income and expenses throughout the year
• Submit quarterly updates to HMRC — four per year, plus a final declaration

What happens if you do nothing?

HMRC operates a points-based penalty system for MTD non-compliance. Each missed or late quarterly submission earns one penalty point. Once you reach the threshold — four points for quarterly reporters — a £200 penalty is charged, and further penalties accumulate from there.

The key point: these penalties apply in addition to any late payment interest on tax owed. Getting set up now, before points start accumulating, is straightforward with the right accountant.

A note on Brighton's freelance market

Brighton has one of the highest concentrations of self-employed professionals in the South East — creative agencies, tech consultants, marketing specialists, and independent advisers are all over the city. Many will cross the £50,000 threshold and need to act. Many others will cross it in future years. Getting the right software and habits in place now makes the eventual transition much smoother.