Making Tax Digital for Freelancers: What You Need to Know in 2026

Making Tax Digital (MTD) is HMRC's programme to move UK tax returns fully online — and if you're a freelancer or small business owner, it almost certainly applies to you.

Here's what you need to know, and how AxiomaBooks makes it simple.

**What is Making Tax Digital?**

MTD has two main phases:

**MTD for VAT** — Already mandatory for most VAT-registered businesses. If you're VAT-registered (threshold: £90,000/year), you must submit your VAT returns using compatible software or an HMRC-recognised bridging tool.

**MTD for Income Tax Self-Assessment (ITSA)** — Rolling out from April 2026. Self-employed individuals and landlords must file quarterly income and expense updates to HMRC digitally, instead of a single annual Self-Assessment return. The rollout schedule: April 2026 for earnings over £50,000/year; April 2027 for £30,000+; April 2028 for £20,000+.

**Do I Need to Change My Software?**

Only if you're not already using compatible software. HMRC allows the use of bridging software — a tool that sits between your accounting records and HMRC's systems — as a fully compliant route to MTD. You do NOT need expensive dedicated MTD software.

**How AxiomaBooks Handles MTD**

AxiomaBooks calculates your 9 VAT return boxes directly from your bookkeeping records. At quarter-end, you download those figures as a CSV file from your VAT Return report.

You then import that CSV into any MTD bridging software like My Tax Digital — an HMRC-recognised bridge — and submit directly to HMRC. The whole process takes less than 10 minutes.

This route is fully HMRC-compliant. The CSV export from AxiomaBooks imported into HMRC-recognised bridging software constitutes a valid digital link under HMRC's digital-links requirement (VAT Notice 700/22).

**What Are the 9 VAT Return Boxes?**

Box 1 — VAT due on sales and other outputs Box 2 — VAT due on acquisitions from EC member states Box 3 — Total VAT due (Box 1 + Box 2) Box 4 — VAT reclaimed on purchases and other inputs Box 5 — Net VAT to pay HMRC or reclaim (Box 3 minus Box 4) Box 6 — Total value of sales, excluding VAT Box 7 — Total value of purchases, excluding VAT Box 8 — Total value of goods supplied to EC countries Box 9 — Total value of goods acquired from EC countries

**What About Income Tax MTD (ITSA)?**

If you're self-employed and approaching the £50,000 threshold, you need to prepare for MTD for Income Tax. Instead of filing one annual Self-Assessment return, you'll file quarterly updates of your income and expenses, plus a final end-of-year declaration. Some MTD bridging software, like My Tax Digital, also covers ITSA — the same tool handles both VAT MTD and Income Tax MTD.

**How to Get Started**

1. Sign up for AxiomaBooks (14-day free trial, no card required). 2. Log your income and expenses as usual throughout the quarter. 3. At VAT quarter-end, go to the VAT Return report — your 9 boxes are calculated automatically. 4. Download the CSV export and import it into any MTD bridging software like My Tax Digital to file.