Making Tax Digital for Income Tax: What It Means for UK Creatives

Whether you're a freelance illustrator, camera operator, voice actor or stage manager, keeping on top of tax paperwork can feel like a job in itself. And now, there's a new system on the way: Making Tax Digital for Income Tax Self Assessment (MTD for ITSA).

If that sounds like something HMRC dreamt up in a boardroom — you’re not far off. But it’s happening, and it’s set to change how self-employed creatives manage their tax.

Here’s what you need to know — and how to stay ahead of it without losing hours of your time (or your sanity).

First things first: what is MTD for Income Tax?

Let’s break it down.

Making Tax Digital (MTD) is HMRC’s long-term plan to move tax reporting fully online. The goal is to reduce errors and get rid of paper returns altogether. It started with VAT — now it’s being rolled out to income tax.

Instead of doing one big Self Assessment return at the end of each year, you’ll need to:

• Keep your income and expenses recorded digitally

• Send updates to HMRC every quarter

• Submit a final statement once the tax year ends

That’s it in a nutshell. No more scrambling to find receipts in a shoebox. No more last-minute totals scribbled on your phone. But yes — it does mean changes in how you manage things day to day.

Does this apply to you?

The key point is whether your self-employed or property income tops £50,000 in a tax year. If it does, then MTD for Income Tax will apply to you from April 2026.

This includes:

• Freelancers working as sole traders

• Creatives with multiple income streams (e.g. commissions, royalties, teaching)

• Landlords with rental income

If your income falls between £30,000 and £50,000, you’re likely to join the scheme from April 2027 — though HMRC hasn’t finalised all the details yet.

And if you're under £30k? For now, you're out of scope — but that could change in future. So it’s worth getting familiar with the system early, even if you’re not being brought into it straight away.

So what will actually change?

Here’s how things will look under MTD for Income Tax:

1. You’ll need digital records — no more paper ledgers or loose notes.

2. You’ll send updates every 3 months — four reports a year instead of one.

3. You’ll still submit a final statement — this ties everything together at year-end.

In other words, your tax reporting becomes a little-and-often job, rather than a once-a-year stress. That might feel like a bigger burden, but it can also make things more manageable — especially with the right tools in place.

What sort of software will you need?

You won’t be able to use pen-and-paper methods anymore, and basic spreadsheets probably won’t cut it either (unless you’re using bridging software, which can get fiddly).

Instead, HMRC requires you to use approved accounting software, like:

• FreeAgent

• QuickBooks

• Xero

• Sage

Not sure where to start? That’s where we come in.

At Creative & Numbers, we help creatives find the best software for their workflow — and we’ll even take care of setup and training so you don’t have to go it alone.

Is it going to be more work?

It might feel that way at first — especially if you’ve never used digital tools before. But done properly, it can actually simplify things. You’ll have:

• Clear records throughout the year

• Fewer surprises at tax time

• Better awareness of what you owe (and when)

We know how chaotic creative schedules can be — gigs at the last minute, invoices half-written on your phone, bits of income from everywhere. MTD encourages a bit more structure, which can really help when you’re juggling projects.

And if you’re already drowning in receipts or chasing unpaid invoices, this could be a chance to clean things up.

What if you’re not ready?

Totally fair. It’s a big shift — especially if you’ve been doing your own tax returns the same way for years.

That’s why now’s the best time to get support.

We work with UK creatives every day to:

• Review your current setup

• Work out whether MTD applies to you

• Recommend the right software

• Manage your quarterly submissions and year-end reporting

Think of us like your backstage crew — sorting the details so you can focus on the real work.

Why prepare early?

Even if the deadline feels far away, setting things up now gives you time to test the waters — no pressure, no panic.

You’ll get used to digital systems gradually. You’ll have support if anything goes sideways. And you’ll avoid the last-minute scramble when the rules finally kick in.

In short? MTD is coming — but you’ve got this

If you’re earning over £50,000 and working for yourself, Making Tax Digital for Income Tax will be mandatory from April 2026. It means more frequent reports, digital tools, and a shift in how you handle your numbers.

But you don’t need to figure it all out alone. At Creative & Numbers, we specialise in supporting people exactly like you — the UK’s freelance creatives.

Want help getting MTD-ready, without the hassle?

Book a free call with us and we’ll take it from there.