Making Tax Digital for Income Tax: what is changing and when
Making Tax Digital for Income Tax (MTD for ITSA) started on 6 April 2026 and is the biggest change to Self Assessment in years. If you're a sole trader or landlord, here's what it involves, who it affects, and when.
What is MTD for Income Tax?
MTD for Income Tax adds digital record-keeping and quarterly updates to your Self Assessment, using compatible software. It doesn't replace the return. The quarterly updates are summaries, not tax returns, and you still submit a tax return after the tax year ends, through your MTD software, by 31 January. So you'll send four quarterly updates for each self-employment or property business, plus the tax return.
Who it affects, and when
It's being phased in by income level (your gross self-employment and/or property income, before expenses):
| From | If your qualifying income is over | In the tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
So each stage looks at your income from two tax years earlier. HMRC checks your qualifying income from your Self Assessment return and writes to you if you need to join, but if no letter arrives it's still your responsibility to check.
It applies to sole traders and landlords. Income from employment or pensions doesn't count toward the threshold, but it can still need reporting elsewhere.
Key point: the threshold is based on turnover/gross income, not profit. A landlord with £55,000 of rent in 2024/25 but modest profit has had to use MTD since April 2026.
What you'll need to do
- Keep digital records of income and expenses (spreadsheets alone won't be enough unless bridged by software).
- Send a quarterly update to HMRC through compatible software.
- Submit your tax return after the tax year, through your MTD software, by 31 January, adding any other income such as savings interest or dividends.
Quarterly update deadlines
| Update period (standard) | 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 (the following tax year) |
Each update is cumulative, covering the tax year so far. If you use calendar update periods (1 April to 31 March), the deadlines are the same. For 2026/27 the first deadline, 7 August 2026, has passed; the next is 7 November 2026.
Penalties
HMRC won't apply penalty points for late quarterly updates in the 2026/27 tax year, but you have to send all of them before you can submit your tax return, and penalty points still apply to a late tax return. From 2027/28, each missed quarterly update or tax return deadline earns a point, and reaching 4 points means a £200 penalty, with another £200 for each further missed deadline.
What it means in practice
More frequent admin, but also fewer year-end surprises if your records are kept current. The main job is getting onto compatible software and into a quarterly rhythm.
Not affected yet?
If your qualifying income is under the threshold for now, you keep filing your Self Assessment return in the usual way. But the threshold drops to £30,000 (based on 2025/26 income) from April 2027 and £20,000 (based on 2026/27 income) from April 2028, so it's worth getting your record-keeping ready. We'll tell you exactly when it applies to you.