Making Tax Digital for Income Tax: What Changes in April 2026

MTD for Income Tax applies to sole traders and landlords based on qualifying income, which is gross income from self-employment and property combined, before expenses:

• From 6 April 2026: qualifying income over £50,000.
• From 6 April 2027: over £30,000.
• From 6 April 2028: over £20,000.

The test uses the income shown on the tax return two years earlier, so the 2024/25 return decides whether you are in from April 2026. Limited companies are not affected; MTD for Corporation Tax has no confirmed date. Partnerships are expected to follow later.

Four quarterly updates a year, one for each self-employment and one for each property business, plus a final declaration. The quarterly update is a summary of income and expenses for the quarter, sent from software. It is not a tax return and no tax is due with it, though HMRC will show a running estimate. Deadlines are 7 August, 7 November, 7 February and 7 May, for quarters ending 5 July, 5 October, 5 January and 5 April; you can elect calendar quarters instead.

The final declaration, due 31 January as now, adds accounting adjustments, reliefs and other income and replaces the Self Assessment return. Payment dates are unchanged: 31 January and 31 July.

Records must be kept digitally and submitted through MTD-compatible software with unbroken digital links from the record to HMRC. Xero, QuickBooks, FreeAgent and Sage all qualify, as do several free tools for the simplest cases. Spreadsheets are permitted only with bridging software and no manual copying between them; in practice, cloud accounting with a bank feed is simpler and cheaper than maintaining a compliant spreadsheet chain.

Late submissions earn a point each. At four points, with quarterly submissions, a £200 penalty applies, and a further £200 for every subsequent late submission until the points expire after a period of compliance. Late payment is penalised separately: nothing for the first 15 days, 3 percent of the tax at day 15, another 3 percent at day 30, then 10 percent a year from day 31, plus interest.

1. Check your 2024/25 return. If self-employment plus property income exceeds £50,000, you are in from April 2026.
2. Choose software and connect the bank feed. Do it before 6 April 2026 so the first quarter is captured from day one.
3. Separate property and trade records if you have both; each needs its own update.
4. Authorise an agent if you want the updates handled for you. The quarterly update is a natural fit for a bookkeeping service that already reconciles monthly.