Making Tax Digital for Income Tax: who, when and how
If you're a sole trader or landlord, MTD replaces once-a-year record keeping with digital records and quarterly updates to HMRC. Whether you're in, and from when, depends on your qualifying income.
You need Making Tax Digital for Income Tax if you're a sole trader or landlord with qualifying income (gross self-employment plus property income) over £50,000 (from 6 April 2026, based on 2024/25), over £30,000 (from 6 April 2027, based on 2025/26) or over £20,000 (from 6 April 2028, based on 2026/27).
Last checked: 4 October 2026 (GOV.UK).
Qualifying income = your total gross self-employment income plus gross property income (turnover before expenses), not profit. Employment income and savings don't count.
When MTD for Income Tax applies
| If your qualifying income is over… | In tax year | You must use MTD from |
|---|---|---|
| £50,000 | 2024/25 | 6 April 2026 |
| £30,000 | 2025/26 | 6 April 2027 |
| £20,000 | 2026/27 | 6 April 2028 |
HMRC checks your Self Assessment return each year and writes to you if you're in. But it's your responsibility even if no letter arrives. Partnerships will join later, and some people are exempt (for example, if you're digitally excluded).
What you have to do
- Keep digital records of each income and expense in HMRC-compatible software (or a spreadsheet linked to "bridging" software).
- Send a quarterly update for each business. Each one is a running total of your income and expenses for the year so far, not a tax return.
- File a tax return by 31 January after the tax year, through your software, as before. Payment dates don't change.
Quarterly update deadlines
| Standard period | 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 |
If your accounts run from 1 April to 31 March, you can choose calendar periods (to 30 June, 30 September, 31 December and 31 March). The deadlines are the same.
Penalties
For 2026/27, HMRC won't give penalty points for late quarterly updates, but late tax returns still get points. From 2027/28, each late update earns a point, and 4 points means a £200 penalty.
Getting ready this year
- Keep this year's income and expenses in clear categories now, so switching to software is easy.
- Use the Self Assessment deadline countdown for this January's 2025/26 return.
- Your 2025/26 return decides whether you join in April 2027, so check your gross income on it.
Sources: GOV.UK: find out if and when you need to use MTD for Income Tax, send quarterly updates. This is a guide, not tax advice.
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When does Making Tax Digital for Income Tax start?
It started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000 in 2024/25. It applies over £30,000 (based on 2025/26) from 6 April 2027, and over £20,000 (based on 2026/27) from 6 April 2028.
Is the MTD threshold based on profit or turnover?
Turnover. Qualifying income is your gross self-employment income plus gross property income, before expenses. Employment income, pensions and savings interest don't count.
Can I use a spreadsheet for MTD for Income Tax?
Yes, if you link it to HMRC-recognised bridging software that sends the quarterly updates. The spreadsheet holds the records and the software submits them.
Do I still need a Self Assessment return under MTD?
Yes. You still file a tax return by 31 January after the tax year, but through your MTD software, after your four quarterly updates.
Kit list: Home office kit for sole traders: what you can claim and what to buy. (Our page. It includes Amazon affiliate links.)
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