What is Making Tax Digital? Implications for Content Creators
If you earn money online as a content creator, whether through OnlyFans, Fansly, YouTube, TikTok, Instagram or any other platform, you may have already heard about changes to tax filing coming down the track.
HMRC’s Making Tax Digital is a new system that requires people to keep digital records and file certain tax information using approved software rather than relying on paper, spreadsheets or manual submissions.
In basic terms, Making Tax Digital is HMRC’s plan to modernise the tax system by moving self-employed individuals, including content creators, onto a fully digital reporting process.
As a firm who has spent years helping creators navigate the tax world, we’ve seen first-hand how confusing this topic can feel.
Our aim here is to break everything down clearly and honestly so you can understand what is changing, why it matters, and how to prepare with confidence.
Key Takeaways
- Making Tax Digital is HMRC’s move towards digital record keeping and software-based tax submissions.
- It will eventually apply to most self-employed individuals, including content creators.
- MTD for Income Tax becomes compulsory from April 2026 for many taxpayers.
- If you earn income from side hustles or content creation, you may fall inside the MTD rules.
- You must keep digital records and send quarterly updates through HMRC-approved software.
- You will still file a final annual return, but the process becomes more structured.
- Creators can still use an accountant; in fact, most will benefit from doing so.
- There are clear pros and cons, and early preparation will make the transition much easier.
Chapters
- What is Making Tax Digital (MTD)?
- Why Was Making Tax Digital Introduced?
- Do Content Creators Have to Pay Tax from Side Hustles?
- Is Making Tax Digital Compulsory?
- How Much Must I Earn to Meet the MTD Threshold?
- Pros and Cons of Making Tax Digital
- Additional Admin
- Keeping Digital Records
- Paying for Accounting Software
- Submitting Quarterly Updates
- Submitting Annual Returns
- Why Has HMRC Written to Me About MTD?
- How to Register for Making Tax Digital
- What Must I Do to File MTD Income Tax?
- Can I Opt Out of MTD for Income Tax?
- Can I Use an Accountant to File My Taxes Instead?
- Final Thoughts
What is Making Tax Digital (MTD)?
Making Tax Digital, often referred to as MTD, is HMRC’s long-term initiative to modernise how tax is recorded, managed and submitted in the UK.
HMRC wants individuals and businesses to maintain digital financial records and use compatible accounting software to send updates directly to them throughout the year.
As a specialist accountancy firm working with digital creators, we’d describe it as HMRC’s way of replacing paperwork, spreadsheets and annual guesswork with a more structured digital reporting system.
Rather than waiting once a year to tally up earnings, MTD requires smaller summaries to be submitted every quarter through approved software.
It’s designed to reduce mistakes, improve accuracy and help both HMRC and taxpayers keep on top of their obligations.
At its core, Making Tax Digital is about moving self-employed people, landlords and small businesses into a world where tax information is handled digitally rather than manually.
Why Was Making Tax Digital Introduced?
In our experience, the government rarely changes anything without a reason, and MTD is no exception.
It was introduced for three main purposes:
Reduce Errors
Every year, billions of pounds are lost due to mistakes in self-assessment returns.
A digital-first system should help minimise miscalculations, lost receipts, incorrect figures and general human error.
Simplify Taxation
The government is trying to simplify tax admin.
When everything is digital, it becomes easier for HMRC to analyse trends, cross-check information and flag inconsistencies.
For content creators who may be earning through multiple platforms, this can actually make life easier once everything is set up correctly.
Close Tax Gaps
The tax gap is the difference between the tax that HMRC should theoretically receive and the tax that it actually receives.
Digital reporting helps HMRC ensure everyone pays the correct amount.
Do Content Creators Have to Pay Tax from Side Hustles?
Yes, they do.
Any income from side hustles, including content creation, is taxable in the UK if it exceeds the £1,000 trading allowance.
Once you go beyond this amount in a tax year, you must register for self-assessment and declare your income.
This applies to:
- OnlyFans subscriptions
- Fansly earnings
- Tips
- Pay-per-view content
- YouTube ad revenue
- Affiliate income
- Sponsored posts
- Digital product sales
- Brand collaborations
- Live stream gifts
Many creators mistakenly believe that payments through apps, payment processors or foreign platforms are treated differently, but the rules are clear.
Taxable income is taxable income, regardless of the source.
If your creator income continues to rise, you will eventually fall within the Making Tax Digital rules.
Is Making Tax Digital Compulsory?
Yes, Making Tax Digital is compulsory, but not for everyone at the same time.
The rollout has been delayed multiple times, which has caused confusion, but the current timetable is now set.
From April 2026, MTD for Income Tax Self-Assessment applies to individuals whose annual self-employment or property income exceeds £50,000.
From April 2027, it will apply to those earning above £30,000.
This means many content creators fall into the first or second phase.
Those earning below the threshold do not need to join MTD yet, but it is likely that HMRC will expand the requirement further in the future.
How Much Must I Earn to Meet the MTD Threshold?
The threshold applies to your combined income from self-employment and property.
For content creators, this means:
- All your creator-related income is combined into one figure.
- If that figure exceeds £50,000 in 2026 or £30,000 in 2027, you must comply with MTD.
Importantly, this threshold refers to turnover, not profit.
We’ve seen creators misunderstand this, assuming that only profits count.
HMRC measures the total income you receive before expenses.
Pros and Cons of Making Tax Digital
Just like any major change, MTD has advantages and disadvantages.
Additional Admin
The biggest challenge for creators is the additional administrative work.
Quarterly updates must be submitted through software, meaning you can no longer leave your bookkeeping until the end of the year.
Keeping Digital Records
You must maintain digital records of your income and expenses.
Paper receipts will not be enough unless they are scanned or stored digitally.
This requires organisation, especially for creators with many small transactions.
Paying for Accounting Software
Compatible software often comes with a subscription cost.
While some simple free tools may exist, most creators need something more robust, particularly if they earn from multiple platforms.
Many of my clients use software like Xero, QuickBooks or FreeAgent.
Submitting Quarterly Updates
Quarterly updates summarise your income and expenses.
They are not full tax returns, but they do require accurate bookkeeping.
HMRC will expect timely submissions every three months.
Submitting Annual Returns
MTD does not remove the need for an end-of-year tax submission.
You still need to send an annual statement called the End of Period Statement, along with a final declaration confirming your total tax liability.
Why Has HMRC Written to Me About MTD?
We often hear from creators who panic when they receive HMRC letters about Making Tax Digital.
In most cases, the letter is simply to inform you that you meet, or are expected to meet, the MTD threshold.
It does not necessarily mean you are in trouble.
These letters usually outline:
- Whether you fall into the mandatory MTD category
- When you need to register
- What you must do to comply
It’s HMRC’s way of giving you advance notice so you can prepare and avoid problems later.
How to Register for Making Tax Digital
Registering involves two stages.
Firstly, you need a Government Gateway account linked to your self-assessment profile.
Secondly, you must sign up for MTD and connect HMRC-approved software to your account.
The process is straightforward, but in our experience, most creators prefer to let their accountant handle it.
Connecting the software, verifying records and ensuring everything synchronises correctly can feel overwhelming at first.
What Must I Do to File MTD Income Tax?
To comply with MTD for Income Tax, you must do two things:
Digital Records
You need to keep digital records of:
- All income
- All allowable expenses
- Any other relevant financial information
This means logging your earnings from platforms like OnlyFans, Fansly, YouTube and TikTok within your accounting software.
You cannot rely solely on manual spreadsheets once MTD applies to you.
Quarterly Updates
You must send HMRC a summary of your income and expenses every quarter.
These updates give HMRC a snapshot of your financial position and help prevent large tax surprises at the end of the year.
Quarterly submissions must be accurate, timely and submitted using approved software.
Can I Opt Out of MTD for Income Tax?
In most cases, no.
Once you meet the threshold, MTD becomes compulsory.
Exemptions are extremely limited and usually apply only to individuals who:
- Have specific disabilities
- Live in remote areas without internet access
- Have religious objections to digital technology
For the vast majority of creators, opting out will not be possible.
Can I Use an Accountant to File My Taxes Instead?
Yes, absolutely.
In fact, we strongly recommend it for most content creators.
The complexities of multi-platform income, cross-border payments and digital deductions can make bookkeeping extremely challenging.
An accountant can:
- Manage your digital records
- Submit quarterly updates on your behalf
- Ensure you remain fully compliant
- Help you plan for tax bills
- Prevent errors and penalties
MTD does not mean you must handle everything yourself.
It simply means the process must be digital.
Final Thoughts
Making Tax Digital is one of the most significant changes to the UK tax system in decades.
For content creators, especially those earning through OnlyFans, Fansly, YouTube and other digital platforms, understanding the requirements early will save time, stress and potential penalties.
Although the system introduces new responsibilities, it can also make tax management far more organised and transparent once you are set up properly.
If you are unsure about how MTD applies to you, or worried about registration, bookkeeping or quarterly submissions, contacting us for professional advice is one of the best steps you can take.
With good preparation and the right support, Making Tax Digital can be manageable, predictable and even beneficial for your creative business.
Disclaimer: Any advice in this publication is not intended or written by One and Only Accounts to be used by a client or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party matters herein.
