Making Tax Digital for Income Tax went live on 6 April 2026. If your income from self-employment or property exceeds £50,000, you are now legally required to keep digital records and submit quarterly updates to HMRC. This is not optional — and the first deadline is 5 August 2026.
Making Tax Digital for Income Tax Self Assessment — MTD for ITSA — replaces the annual self-assessment return with quarterly digital reporting. Instead of one January submission, you submit four quarterly updates during the year and a final declaration in January. HMRC wants real-time visibility of business income rather than a year-end scramble. For you, it means a fundamental change to how you manage your records and report to HMRC.
MTD is not a one-off event. It is a permanent change to how sole traders and landlords interact with the tax system. The sooner you treat it as your new normal, the less painful it becomes.
MTD for Income Tax is not the same as Making Tax Digital for VAT, which has been mandatory since 2019. This article covers MTD for Income Tax only — the new regime that came into force April 2026.
From 6 April 2026, MTD applies to sole traders and landlords whose gross income from self-employment and property combined exceeds £50,000 per year. Gross income means your turnover before expenses — not your profit. A freelancer who invoiced £55,000 with £20,000 in costs is in scope, even though their profit is only £35,000.
It also applies to combined income. A landlord earning £30,000 in rent and £25,000 from self-employment has £55,000 combined and is in scope, even though neither source individually crosses the threshold.
£50,000+ income: Mandatory from 6 April 2026 — you should already be enrolled
£30,000–£50,000 income: Mandatory from 6 April 2027 — roughly 12 months to prepare
Under £30,000 income: No confirmed date yet — watch this space
Four times a year you submit a summary of your income and expenses to HMRC through compatible software. Each submission covers one quarter of the tax year and must be made within one month of each quarter end. The first deadline — covering April to July 2026 — is 5 August 2026.
Quarterly submissions are not tax payments. You still pay any tax owed by 31 January. The submissions are digital records of your income and expenses for each period, sent to keep HMRC informed throughout the year rather than all at once in January.
HMRC requires each transaction to be recorded digitally — meaning in software, not a paper ledger or disconnected spreadsheet. Records must include the date, amount, and category of each income and expense item, and must be held in MTD-compatible software that can submit directly to HMRC.
A standard Excel spreadsheet does not qualify unless connected to bridging software. Recording figures in a notebook and entering them in January — which is how many sole traders have operated for years — is no longer compliant once you are in scope.
A spreadsheet alone is not MTD-compliant. Your software must connect to HMRC’s API and submit updates directly. Check the HMRC approved software list before assuming your current system qualifies.
HMRC uses a points-based penalty system. Each missed submission earns one penalty point. When points reach four, a £200 fine is triggered. Points reset after a sustained period of compliance. Late payment penalties follow existing rules: 5% of unpaid tax after 30 days, another 5% at six months, another 5% at twelve months.
HMRC has indicated a soft-landing approach in year one, focusing on education over enforcement. But the deadlines are real and the penalties will apply — taking a relaxed attitude because it is the first year is a genuine risk.
Yes. Landlords with property income above £50,000 are in scope from April 2026, on identical terms to sole traders. Quarterly submissions cover rental income and allowable expenses including mortgage interest (subject to Section 24 restrictions), letting agent fees, maintenance, and insurance. If you have both self-employment and rental income, you submit separate quarterly updates for each — they are tracked separately by HMRC but both feed into your final January declaration.
Limited companies are not affected by MTD for Income Tax. They fall under a separate Making Tax Digital for Corporation Tax programme, which has no confirmed live date. If you run a limited company, the rules in this article do not apply to your company — though they may apply to your personal income if you also have self-employment earnings alongside your director salary. See our director salary and dividend guide for more on how the two interact.
Sign up for MTD with HMRC. You cannot simply start submitting — you must register through your Government Gateway account or through compatible software. HMRC may have written to those already in scope. If not, sign up proactively rather than waiting to be chased.
Start keeping digital records immediately. Every transaction from 6 April 2026 needs to be in MTD-compatible software. If you are reading this after that date, start now — reconstruct what you can from bank statements and keep everything going forward.
Choose your software. Your software must connect to HMRC and submit quarterly updates directly. Look for something that categorises income and expenses easily, tracks your deadlines automatically, and gives you a running tax estimate so you are never surprised in January.
Connects to HMRC directly · Categorises transactions automatically · Tracks quarterly deadlines · Gives you a live tax estimate · Is a deductible business expense
Every transaction you log becomes a compliant digital record. Your quarterly deadlines are tracked and flagged. When 5 August arrives, your Q1 figures are already prepared.
Free to start. No card needed. MTD scope assessed instantly.
This article is for general guidance only and reflects HMRC rules as of April 2026. Tax rules change — always verify your position with a qualified accountant or directly with HMRC. Taxify provides estimates and guidance, not regulated financial advice.