Skip to content
Making Tax Digital

Making Tax Digital for Income Tax: who needs to join, and when

From April 2026 many sole traders and landlords must keep digital records and send HMRC quarterly updates. Here is who is affected, when, and what to do now.

Making Tax Digital for Income Tax (often shortened to MTD) is the biggest change to Self Assessment in a generation. Since 6 April 2026, many sole traders and landlords have had to keep their records digitally and send HMRC a short update every quarter. More people join in April 2027 and again in April 2028.

This article explains who has to join and when, what “qualifying income” means, what you have to do, and the steps to take now.

Who has to join, and when

MTD for Income Tax applies to you if you are registered for Self Assessment, you have income from self-employment, from property, or from both, and your qualifying income is over the threshold. HMRC looks at the tax return for an earlier year to decide:

Qualifying income in the tax return for Over You must start from
2024 to 2025 £50,000 6 April 2026
2025 to 2026 £30,000 6 April 2027
2026 to 2027 £20,000 6 April 2028

HMRC will normally write to you if your return shows you are over the threshold, but it is your responsibility to check, even without a letter.

Partnerships do not have to join yet. HMRC has said they will in the future but has not given a date.

What counts as qualifying income

Qualifying income is your total income from self-employment and property before expenses, often called turnover or gross income. It is not your profit.

Example: Amira lets a flat for £25,000 a year and runs a small catering business with turnover of £27,000. Her qualifying income is £52,000, even though her profits are much lower. If those were her 2024 to 2025 figures, she has had to use MTD since 6 April 2026.

What you have to do

1. Use software that works with MTD

You need software that HMRC recognises for MTD for Income Tax. It holds your records and sends your updates. Bridging software, which links a spreadsheet to HMRC, is allowed.

2. Keep digital records

Each sale and expense is recorded in the software (or a linked spreadsheet), under the same headings as the Self Assessment return. You do not send HMRC the receipts or invoices themselves.

3. Send a quarterly update

Every three months you send HMRC running totals of your income and expenses for the tax year so far. You must send an update even if nothing happened in the period. The standard periods and deadlines are:

Period Update due by
6 April to 5 July 7 August
6 April to 5 October 7 November
6 April to 5 January 7 February
6 April to 5 April 7 May

If your accounts run to 31 March, you can choose calendar quarters (to 30 June, 30 September, 31 December and 31 March) with the same deadlines. Because each update is a running total, a mistake in one quarter can simply be corrected in the next.

4. Submit your tax return

After the year ends, you still finalise your return, adding any other income, reliefs and adjustments. It is sent through MTD software by 31 January, as now.

Penalties: the first year is gentler

MTD uses a points system for late submissions. HMRC has said it will not give penalty points for late quarterly updates in the 2026 to 2027 tax year. Points still apply to a late tax return. From 2027 to 2028, each late quarterly update earns a point, and reaching four points brings a £200 penalty.

What to do now

How we help

We set our clients up for MTD, keep their digital records from the bank statements and receipts they upload to our client portal, and send each quarterly update and the final return for them. If you are not sure whether MTD applies to you, request a call back and we will check your figures with you.

Sources

Want help applying this to you?

Request a call back, or start an enquiry for a quotation.