Quick answer: If you’re a sole trader or landlord and your combined gross income from self-employment and property was over £50,000, Making Tax Digital (MTD) for Income Tax has applied to you since 6 April 2026. Over £30,000, it starts on 6 April 2027. Over £20,000, on 6 April 2028. You’ll need compatible software, digital records and four quarterly updates a year, on top of your tax return.
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Tell us your rough income from work and property and we’ll confirm your start date, free and with no obligation. We help sole traders and landlords across the UK.
In this guide
- What is Making Tax Digital for Income Tax?
- Does Making Tax Digital apply to me?
- What are the quarterly deadlines for 2026/27?
- What happens if I miss a deadline?
- What software do I need?
- What should I do now?
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax changes how sole traders and landlords report to HMRC. Instead of gathering a year of paperwork and doing one tax return, you keep your records digitally as you go and send HMRC a short summary of your income and expenses every three months.
Three things change:
- Digital records. Every sale and every expense goes into software, not a notebook or a shoebox of receipts.
- Quarterly updates. Four times a year your software sends HMRC a summary of your income and expenses so far.
- Compatible software. HMRC doesn’t provide free software for this, so you need a product that connects to HMRC.
What doesn’t change: you still send a final tax return by 31 January after the tax year ends, and you still pay your tax by the same deadlines. The quarterly updates don’t create a tax bill on their own.
Does Making Tax Digital apply to me?
It depends on your qualifying income: your total gross income from self-employment and property combined, before expenses. That last part catches people out. A business with £35,000 of sales and £20,000 of costs only makes £15,000 profit, but it’s the £35,000 that counts.
Wages from a job, pensions, savings interest and dividends don’t count towards the threshold.
| Your qualifying income | You must start | Based on your tax return for |
|---|---|---|
| Over £50,000 | 6 April 2026 (already started) | 2024/25 |
| Over £30,000 | 6 April 2027 | 2025/26 |
| Over £20,000 | 6 April 2028 | 2026/27 |
The £30,000 group is the one to watch now. Whether you’re in from April 2027 is decided by the 2025/26 tax return that’s due by 31 January 2027, so you’ll know for certain only a couple of months before you have to start.
An example. A self-employed plumber takes £24,000 a year in sales and also rents out a flat for £800 a month (£9,600 a year). Their qualifying income is £33,600, so they’re in from April 2027, even though their profit after expenses is much lower. If they also had a part-time job, those wages wouldn’t change the answer.
If you own a property jointly, only your share of the rent counts. HMRC can exempt people who can’t reasonably use digital tools, for example because of age, disability or where they live, but you have to apply.
Close to £30,000? Let’s check before April.
We’ll look at your figures, tell you if you’re in, and set you up with the right software so your first quarter is painless. We work online with clients anywhere in the UK.
What are the quarterly deadlines for 2026/27?
The deadlines are the same for everyone using standard tax-year periods, whatever your business year end.
| Quarter covers | Update due |
|---|---|
| 6 April to 5 July 2026 | 7 August 2026 |
| 6 July to 5 October 2026 | 7 November 2026 |
| 6 October 2026 to 5 January 2027 | 7 February 2027 |
| 6 January to 5 April 2027 | 7 May 2027 |
| Final tax return for 2026/27 | 31 January 2028 |
You can choose calendar quarters instead (1 April to 30 June, and so on); the deadlines stay the same. Each update is cumulative, covering the tax year so far, so a mistake in one quarter can be corrected in the next.
What happens if I miss a deadline?
If you had to start in April 2026, HMRC has said it won’t give penalty points for late quarterly updates in 2026/27. That’s a soft landing, not a pass: you still have to send every update before you can file your tax return.
From the 2027/28 tax year, a points-based system applies. Each missed deadline earns a point, and once you reach the limit you get a financial penalty. Paying tax late still costs interest and penalties, just as it does now.
What software do I need?
You need software on HMRC’s list of products that work with MTD for Income Tax. Popular choices include Xero, QuickBooks, Sage and FreeAgent. Good software:
- connects to your bank so transactions come in automatically
- lets you photograph receipts on your phone
- keeps separate records for each business and each property income source
- builds and sends the quarterly update in a few clicks
If you’d rather keep your spreadsheet, bridging software can link it to HMRC. It works, but it leaves more of the checking to you.
The right choice depends on how many transactions you have and how much you want to do yourself. We’re Xero partners and also work with QuickBooks, Sage and FreeAgent, so we’ll recommend what suits you rather than what suits us. See our Making Tax Digital service for how we set it up.
What should I do now?
If you’ve been in since April 2026:
- Check your first update (due 7 August 2026) was sent and accepted.
- Get your second update in by 7 November 2026.
- Look at your records monthly, not quarterly, so nothing piles up.
If you’re likely to start in April 2027:
- Add up your gross self-employed and property income for 2025/26.
- Choose your software now and start using it before April, so you learn it without a deadline hanging over you.
- Open a separate bank account for your business or lettings if you haven’t already. It makes digital records far easier.
- Decide who will send your updates: you, or an accountant.
How we can help
We set you up with the right software, connect your bank feeds and show you the few minutes a week that keeps your records in order. Each quarter we check your figures, send your update to HMRC and flag anything that will affect your tax bill, so the final return holds no surprises. You get a fixed price agreed up front, which you can spread over 12 monthly payments. If you already have an accountant, we handle the switch.
Hand Making Tax Digital to us
Fixed-price help with your software, quarterly updates and tax return, for sole traders and landlords across the UK. Free quote, no obligation.
Frequently asked questions
Does my salary from a job count towards the Making Tax Digital threshold? No. Only gross income from self-employment and property counts. Wages from employment, pensions, savings interest and dividends are left out when working out whether you’re in.
Can I still use spreadsheets for Making Tax Digital? Yes, as long as you link them to HMRC with bridging software. Most people find full accounting software easier, because it pulls in bank transactions and builds the quarterly update for you.
Do I still need to do a Self Assessment tax return? Yes. The quarterly updates are summaries only. You still send a final tax return by 31 January after the end of the tax year, and that is where your tax is worked out.
Is there a penalty for a late quarterly update? If you had to start in April 2026, HMRC won’t give penalty points for late quarterly updates in the 2026/27 tax year. You still have to send them before you can file your return. Points-based penalties apply from 2027/28.
Can an accountant send my quarterly updates for me? Yes. An accountant can sign you up, keep or check your digital records and send each quarterly update and your final return on your behalf.
This guide is general information based on the rules for the 2026/27 tax year, checked on 1 October 2026. It isn’t personal advice. Tax rules change and your situation may differ, so speak to us before acting on it.
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