Making Tax Digital (MTD) for Income Tax has now started. It changes how many sole traders and landlords keep records and report to HMRC. This guide explains who needs it, what you must do, and the key dates, in simple English. It covers the 2026 to 2027 tax year (6 April 2026 to 5 April 2027) and the years after.
What is Making Tax Digital for Income Tax?
Under MTD for Income Tax, you must:
- keep digital records of your business and property income and expenses
- use software that works with MTD
- send HMRC a short quarterly update every three months
- send your tax return by 31 January after the end of the tax year
Quarterly updates are not tax returns. They are short summaries of the totals for each income and expense category. HMRC does not receive your individual receipts or invoices.
Who needs to use MTD and when
It depends on your qualifying income. This is your total income from self-employment and property before expenses (your turnover, not your profit). HMRC checks it using your Self Assessment tax return from an earlier year.
- From April 2026: qualifying income over £50,000 (based on your 2024 to 2025 tax return)
- From April 2027: qualifying income over £30,000 (based on your 2025 to 2026 tax return)
- From April 2028: qualifying income over £20,000 (based on your 2026 to 2027 tax return)
Example: a landlord with £18,000 of rent and a self-employed income of £15,000 has qualifying income of £33,000. If those are the figures on the 2025 to 2026 return, they will need MTD from April 2027.
If you are under the limit, you keep sending a normal Self Assessment tax return. Some people can apply for an exemption; HMRC has separate guidance on this.
Quarterly update dates
The standard quarters follow the tax year. Each update is due by the 7th of the month after the quarter ends:
- 6 April to 5 July: due 7 August
- 6 April to 5 October: due 7 November
- 6 April to 5 January: due 7 February
- 6 April to 5 April: due 7 May
You can choose calendar quarters instead (ending 30 June, 30 September, 31 December and 31 March). The due dates are the same.
Each update covers the tax year so far, so you can correct a mistake in a later update without resubmitting an earlier one.
So for anyone already in MTD, the next quarterly update (6 April to 5 October 2026) is due by 7 November 2026.
Your tax return under MTD
After your last quarterly update, you still send a tax return. For the 2026 to 2027 tax year, the deadline is 31 January 2028. MTD does not change the way you pay tax or the dates payments are due.
Penalties
MTD uses a points system for late submissions:
- Each missed deadline gives you a penalty point.
- For quarterly submitters, when you reach 4 points you get a £200 penalty, and another £200 each time you miss another deadline.
- There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. This changes from April 2027.
Use this first year to get your records and software working properly.
Landlords: what changes
Property income counts towards qualifying income. If you rent out property and also have self-employed income, the two are added together. You will need to keep digital records of rent received and property expenses, such as repairs, agent fees and insurance, and send them in your quarterly updates. If you own property jointly, the rules for working out your share are explained in HMRC’s guidance; ask us if you are not sure.
How to get ready
- Check your qualifying income on your 2025 to 2026 tax return. If it is over £30,000, plan for April 2027.
- Choose MTD-compatible software, or let an accountant handle it for you.
- Keep a separate bank account for business or property income if you can. It makes digital records much easier.
- Record income and expenses as you go, not once a year.
- Sign up before your start date, or ask your accountant to sign you up as your agent.
How UK Tax Co can help
We help sole traders and landlords all over the UK, online. We can set up your software, keep your digital records and send your quarterly updates and tax return for you. Our Making Tax Digital service costs £79 per quarter, and a Self Assessment tax return costs £120. If you also need help with bookkeeping, just ask.
Frequently asked questions
Is qualifying income my profit?
No. It is your income from self-employment and property before expenses.
Do I still need a tax return under MTD?
Yes. You send quarterly updates during the year, then a tax return by 31 January after the end of the tax year.
Will I be fined for a late quarterly update this year?
No. There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. From April 2027, late updates will get penalty points.
My qualifying income is £25,000. Do I need MTD?
Not from April 2027, as the limit then is £30,000. But from April 2028 the limit falls to £20,000, based on your 2026 to 2027 tax return, so you may need it then.
Can an accountant do MTD for me?
Yes. An accountant can act as your agent, sign you up and send your updates and return for you.
This article is general guidance, not personal tax advice.
Need help? Call UK Tax Co on 020 7050 0712 or WhatsApp 07579566666.