In short
- Since 6 April 2026, sole traders and landlords with qualifying income over £50,000 have to use Making Tax Digital (MTD) for Income Tax.
- The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028.
- You keep digital records, send four quarterly updates a year using compatible software, then submit your tax return for the year through that software.
Does it apply to me?
It depends on your qualifying income: your total income from self-employment and property, before expenses (in other words, turnover). If you have both, the two are added together. HMRC decides using the tax return you submitted in the previous year.
Example: a sole trader with £55,000 of sales and £20,000 of expenses has qualifying income of £55,000, not £35,000 profit. If the same person also earned £25,000 of rental income, the combined figure would be £80,000.
| Starts on | Qualifying income over |
|---|---|
| 6 April 2026 | £50,000 |
| 6 April 2027 | £30,000 |
| 6 April 2028 | £20,000 (based on income in the 2026 to 2027 tax year) |
You can also sign up voluntarily before you are required to, for the current or the next tax year. To sign up you must be registered for Self Assessment and have submitted a tax return in the last two years. Some people are exempt, so check before you sign up.
What changes in practice
- Digital records: you keep your income and expenses in software that works with MTD.
- Quarterly updates: each update contains totals for each income and expense category. HMRC does not receive individual receipts or invoices, and you do not need to make accounting or tax adjustments before sending one.
- Cumulative: every update covers the period from the start of the tax year, so you can correct earlier figures without re-sending old updates.
- After the final update: you check whether any year-end adjustments are needed to your self-employment and property income, then submit your tax return for the year from your MTD software. For the 2026 to 2027 tax year, the deadline is 31 January 2028. Your 2025 to 2026 return is still filed the usual way, by 31 January 2027.
Quarterly update deadlines
These are the standard update periods and deadlines:
| Update covers | Deadline |
|---|---|
| 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 (in the following tax year) |
Penalties for late updates
- For the 2026 to 2027 tax year, HMRC will not apply penalty points for late quarterly updates. Penalty points still apply to late tax returns.
- After that, each missed quarterly deadline earns a late submission penalty point, and reaching 4 points leads to a £200 penalty.
- If you joined voluntarily, penalties do not apply to late quarterly updates.
A simple checklist
- Work out your qualifying income and compare it with the thresholds above.
- Make sure you are registered for Self Assessment.
- Choose MTD-compatible accounting software and check that it suits your business.
- Keep your records digitally from the start of the tax year.
- Put the four quarterly deadlines in your diary.
If you would rather hand this over, the MTD for Income Tax service covers quarterly updates from £50 a quarter.
Sources
This guide is general information, not personalised tax advice. Rules, thresholds and dates can change, so check GOV.UK or get advice on your own circumstances.