Last updated: 16 October 2026
Has Making Tax Digital for Income Tax started?
Yes. Making Tax Digital (MTD) for Income Tax started on 6 April 2026. It applies first to sole traders and landlords whose qualifying income is over £50,000. Instead of one tax return a year, they must keep digital records and send quarterly updates to HMRC through compatible software, then submit a final declaration after the year ends.
Who has to join and when?
| Start date | Qualifying income over | Based on the tax return for |
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
Qualifying income is your total gross self-employment and property income before expenses, not your profit. Employment income, pensions and dividends do not count. Partnerships will join later.
What you have to do
- Keep digital records of income and expenses in MTD-compatible software or bridging software.
2. Send a quarterly update within about a month of each quarter end.
3. Submit a final declaration by 31 January after the tax year, which replaces the normal tax return.
4. Pay tax on the usual dates, 31 January and 31 July.
Quarterly update deadlines
| Quarter | Period | Deadline |
| 1 | 6 April to 5 July | 7 August |
| 2 | 6 July to 5 October | 7 November |
| 3 | 6 October to 5 January | 7 February |
| 4 | 6 January to 5 April | 7 May |
You can choose calendar quarters instead if your software allows.
Penalties
MTD uses a points-based system for late submissions. Each missed deadline earns a point, and once you reach the threshold (four points for quarterly obligations) you get a £200 penalty. Late payment penalties also apply, plus interest at 7.75% a year. For 2026/27, HMRC guidance on gov.uk confirms there are no penalty points for late quarterly updates, but you must still send them before you can file your tax return, and late filing and late payment penalties still apply. In your first year under the new rules, you also get 30 days rather than 15 to pay or agree a payment plan before late payment penalties start.
Example
Amira is a self-employed hairdresser with £38,000 of takings and also lets a flat for £16,000 a year. Her qualifying income is £54,000, so she joined MTD in April 2026, even though her profit is lower. Her husband has takings of £26,000, so he will not need to join unless his income rises above £20,000 before April 2028, when he will.
Can I be exempt?
You can apply for an exemption if it is not reasonably practical for you to use digital tools, for example because of age, disability, location or religious beliefs. Some groups, such as those without a National Insurance number, are also exempt.
Getting ready
- Choose software early and test it for a quarter.
- Open a separate business bank account to make records easier.
- Agree with your accountant who sends each update.
- Check whether joint property income counts towards your threshold (your share does).
Frequently asked questions
Does MTD change how much tax I pay?
No. It changes how you keep records and report, not the tax rates.
Can I still use spreadsheets?
Yes, with bridging software that links them to HMRC.
Do I need MTD if I am VAT registered?
MTD for VAT is separate and already applies to all VAT-registered businesses.
Can my accountant send the updates?
Yes, once authorised as your agent.
Related: being self-employed, working out your taxable profits and Self Assessment late filing penalties.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with Making Tax Digital for Income Tax. See our Self Assessment tax return service service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
