Making Tax Digital for Income Tax changes how sole traders and landlords report to HMRC. You keep your records in software. You send HMRC a short update every three months. Then you file your tax return from the same software.
It started on 6 April 2026 for people with qualifying income over £50,000. The limit drops to £30,000 from April 2027, then £20,000 from April 2028. This guide shows who’s in, the dates, and what to do now.
Disclaimer: This article gives general information. It’s not tax advice. HMRC rules can change. Check HMRC’s guidance or speak to a qualified accountant about your own position.
Quick Answer
Making Tax Digital for Income Tax covers sole traders and landlords with qualifying income over the limit. The limit is £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028. You keep digital records, send four updates a year and file your return through software.
Who Has to Use Making Tax Digital for Income Tax?
You’re in if you’re a sole trader or landlord and your qualifying income is over the limit. HMRC sets the limit by an earlier year’s income. Over £50,000 in 2024 to 2025 means you started on 6 April 2026. The limit then falls to £30,000 and £20,000.
Here’s HMRC’s timetable. You can check if you need to use MTD on GOV.UK.
| Your qualifying income in | Is over | You must start on |
|---|---|---|
| 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 checks your tax return each year. It writes to you if you’re over the limit. But HMRC says it’s still your job to check, even if no letter arrives.
What Counts as Qualifying Income?
Qualifying income is your total income from self-employment and property, before expenses. HMRC means turnover, not profit. Take a plumber with £45,000 of sales and £20,000 of rent. Their qualifying income is £65,000, even if their profit is much lower.
HMRC counts qualifying income before expenses, so costs don’t come off first.
Own a property jointly? Only your share of the rent counts.
Other income doesn’t count towards the limit. That includes a salary from a job, pensions, savings interest and dividends. You still report that income on your tax return. It just doesn’t push you into MTD.
Who Doesn’t Have to Use It Yet?
Limited companies aren’t in it, because they pay Corporation Tax instead. Partnerships aren’t in it yet, and HMRC will set their date later. People below the limit stay on the normal Self Assessment return. Some people who can’t use computers can ask HMRC for an exemption.
A company director paid by salary and dividends isn’t in MTD for that income. But a director who also lets out property is a landlord too. Their rent can bring them into MTD.
People with an exemption still file a normal Self Assessment return.
Not sure if you file at all? Check who needs to file Self Assessment first.
What Do You Have to Do Under MTD?
Do three things. Keep digital records of your income and expenses in compatible software. Send HMRC a quarterly update four times a year. Then file your tax return through the same software by 31 January. You pay your tax on the same dates as before.
Digital records. Record each sale and each expense in software. If you type up paper notes once a year, you break the rule.
You still keep the receipts and invoices behind each entry. The normal rules on how long to keep financial records still apply.
Quarterly updates. Your software adds up your income and expenses and sends the totals to HMRC. You don’t pay tax with each update.
Tax return. After the year ends, you finish your figures and add any other income. Then you submit the return through your software. The deadline stays 31 January.
When Are the Quarterly Update Deadlines?
There are four deadlines a year: 7 August, 7 November, 7 February and 7 May. Each update covers your income from the start of the tax year to the end of that quarter. So the totals build up through the year. You don’t send four separate slices.
Here are HMRC’s standard periods. HMRC sets them in its guide to sending quarterly updates.
| 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 |
Some businesses use calendar quarters instead, from 1 April. Check which setting your software uses.
What Happens if You Send an Update Late?
For the 2026 to 2027 tax year, HMRC won’t give penalty points for late quarterly updates. From the 2027 to 2028 tax year, each late update earns one point. Four points means a £200 penalty. Late tax returns still earn penalty points.
This break only covers the updates. It doesn’t cover your tax return or your tax payment.
You also can’t file your tax return until all your quarterly updates are in. A late update can hold up the return.
What Software Do You Need?
You need software that works with MTD for Income Tax. HMRC doesn’t make its own and doesn’t recommend any brand. Full accounting packages work. So does bridging software that links your spreadsheet to HMRC. Some products are free for simple tax affairs.
Use HMRC’s tool to find compatible software. It asks a few questions and gives you a list.
Free products often limit the number of transactions. Check the limit before you pick one.
Your accountant may already use a package that works. Ask before you buy your own.
What Changes for Sole Traders?
Sole traders move from one return a year to a steady routine. You record sales and costs as they happen. Your software sends four updates. You file your return at the end. The tax rules and allowable expenses don’t change. Only the way you report changes.
The biggest change is timing. You can’t leave your records until January any more. Each quarter, your figures need to be up to date.
Sole traders with lots of small cash sales feel this most. Set a weekly slot to enter takings.
Have more than one business? Each one needs its own records and updates.
What Changes for Landlords?
Landlords record rent and property costs in software and send quarterly updates too. Your qualifying income is your gross rent, or your share of it if you own jointly. Overseas property counts too if you’re UK tax resident. If your company owns the property, that rent doesn’t count.
Many landlords get their figures from a letting agent. Ask your agent for statements that match the quarterly dates.
Landlords with both rent and self-employment add the two together for the limit. Say you had £25,000 of sales and £30,000 of rent in 2024 to 2025. That’s £55,000, so you started in April 2026.
Does MTD Replace Self Assessment?
No. You still file a Self Assessment tax return each year, through your MTD software. The return now builds on your quarterly figures. You still pay your tax by 31 January, with any payments on account due on 31 January and 31 July.
Your return also covers income outside MTD. That includes job income, dividends and capital gains.
Our Self Assessment tax return service covers your quarterly updates and your final return.
Getting Ready for MTD
Check your qualifying income for 2024 to 2025 and 2025 to 2026. Over £50,000 in 2024 to 2025 means you should already be using MTD. Over £30,000 in 2025 to 2026 means you start in April 2027.
Pick your software at least a few months before your start date. Move your records into it and practise one quarter.
DASA’s Self Assessment accountants set up your software, send your quarterly updates and file your return. Tell us your sales, your rent and your start date. We’ll confirm which plan fits.
This article gives general information about Making Tax Digital for Income Tax. HMRC set these dates and limits for the 2026 to 2027 tax year onwards. It’s not tax advice. Speak to a qualified accountant about your own position.
Last reviewed October 2026 by Raqeeb Marzook, ACCA.
Frequently Asked Questions
When did Making Tax Digital for Income Tax start?
On 6 April 2026, for sole traders and landlords with qualifying income over £50,000 in 2024 to 2025. The limit falls to £30,000 from April 2027 and £20,000 from April 2028.
What counts as qualifying income for MTD?
Your total self-employment and property income before expenses. It’s turnover and gross rent, not profit.
What are the MTD quarterly deadlines?
7 August, 7 November, 7 February and 7 May. Each update covers your income from 6 April to the end of that quarter.
Is there a penalty for a late MTD quarterly update?
Not in the 2026 to 2027 tax year. From the 2027 to 2028 tax year, each late update earns a point, and 4 points means a £200 penalty.
Does MTD replace the Self Assessment tax return?
No. You still file a tax return each year, through your MTD software, by 31 January.