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Making Tax Digital for Income Tax
Making Tax Digital for Income Tax is changing how self-employed people and landlords report to HMRC. Here is who it affects, when, and what you need to do.
8 min read · Updated October 2026 · Reviewed by qualified accountants
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In short
- From 6 April 2026, MTD applies to self-employed people and landlords with qualifying income over £50,000.
- The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
- You keep digital records and send HMRC quarterly updates through compatible software.
- A final declaration replaces the traditional Self Assessment return.
- You can sign up early and some people are exempt.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax (MTD for ITSA) requires self-employed people and landlords to keep their business records digitally and send HMRC regular updates using compatible software. It replaces the once-a-year approach of the traditional Self Assessment return for those within its scope.
Who has to follow the rules and when?
MTD applies to individuals with qualifying income, which is the total of your gross self-employment and UK property income before expenses. Employment income, dividends and savings interest do not count towards the threshold.
| Start date | Qualifying income threshold |
|---|---|
| 6 April 2026 | Over £50,000 |
| 6 April 2027 | Over £30,000 |
| 6 April 2028 | Over £20,000 |
HMRC uses your income from an earlier tax year to decide whether you must join. For April 2026, it looked at your 2024/25 tax return. You can also choose to join voluntarily before you are required to.
What you need to do
- Keep digital records of income and expenses using software or a spreadsheet linked to software.
- Send quarterly updates summarising your income and expenses for each quarter.
- Make a final declaration after the tax year, confirming your total income and claiming reliefs. This replaces the Self Assessment return and is due by 31 January after the tax year.
Quarterly update deadlines
| Quarter ends | Update due by |
|---|---|
| 5 July | 7 August |
| 5 October | 7 November |
| 5 January | 7 February |
| 5 April | 7 May |
You can instead choose calendar quarters, which end on 30 June, 30 September, 31 December and 31 March.
Software needed
You need MTD-compatible software. Check that your chosen product supports quarterly updates and the final declaration before you sign up.
Who is exempt?
Some people can be exempt, for example if it is not reasonably practical for them to use digital tools because of age, disability, location or religion. Exemptions must be applied for. Partnerships and some other groups are being brought in at later dates.
Penalties
MTD uses a points-based system for late quarterly updates. You earn a point for each late submission, and a financial penalty applies once you reach the points threshold. Late payment penalties for tax still apply separately.
How to prepare
- Check your qualifying income against the thresholds for your start date.
- Choose compatible software and set up digital record-keeping.
- Sign up for MTD through your software or HMRC.
- Prepare for your first quarterly update.
We can help you work out whether MTD applies and prepare your final declaration.
Written and reviewed by the Accotax tax team
Accotax is a London firm of qualified accountants and tax consultants, on the ICAEW approved employers list. Our team prepares Self Assessment, landlord and company tax returns every day, and each guide is checked against GOV.UK before it is published and updated every tax year.
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Questions, answered.
Only if your qualifying income is above the current threshold. Smaller businesses join in later years.
Once you are in the scheme, the final declaration replaces the return.
Not in the traditional form. Instead you send quarterly updates and a final declaration after the tax year.
No. It applies to self-employment and UK property income. Employment income does not count towards the threshold.
Yes, if your income is below the threshold you can sign up early to get used to the process.
No. MTD for Income Tax covers sole traders and landlords. Companies pay Corporation Tax under different rules.
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