Making Tax Digital for Income Tax
Four more submissions a year.
Making Tax Digital for Income Tax changes how sole traders and landlords report to HMRC. It is the biggest change to Self-Assessment in a generation, and it is arriving in stages. Here is what it means, in plain English.
Next quarterly update
Quarter 2 update, in 3 weeks
- Over £50,000from April 2026Live
- Over £30,000from April 2027
- Over £20,000from April 2028
In short
What is Making Tax Digital for Income Tax?
A new way of reporting to HMRC for sole traders and landlords. You keep your records in compatible software and send a summary every quarter, then file a final return as before. It started in April 2026 for qualifying income over £50,000, and reaches £30,000 in April 2027 and £20,000 in April 2028.
Reviewed by Lewis WrightAAT licensed accountant, licence 1008968
Who it applies to
Not whether, but when.
Making Tax Digital arrives in stages, and each stage is set by your qualifying income. Find your figure and you have your start date.
Qualifying income is your gross income from self-employment and property added together, taken from your last tax return. It is measured before expenses, and other income — employment, dividends, savings — does not count towards it.
From 6 April 2026
Over £50,000
The first group in. Sole traders and landlords above this figure should already be keeping digital records, and their first quarterly update was due by 7 August 2026.
From 6 April 2027
Over £30,000
The threshold steps down, bringing in a far larger group of sole traders and landlords. If this is you, the year to get ready in is the one before it.
From 6 April 2028
Over £20,000
It steps down again. At this point most people who file a Self-Assessment return for self-employment or property income are within scope.
Not sure which stage you fall into?
Tax year 2026/27
The dates that matter.
These are quarterly updates, not tax returns. The tax return for 2026/27 is still due by 31 January 2028.
- Quarter 1
- 7 August 2026
- Quarter 2
- 7 November 2026
- Quarter 3
- 7 February 2027
- Quarter 4
- 7 May 2027
Dates as published in my guide for Devon businesses.
Quarter 1: 6 April to 5 Julydue 7 August
Quarter 2: 6 April to 5 Octoberdue 7 November
Quarter 3: 6 April to 5 Januarydue 7 February
Quarter 4: 6 April to 5 Aprildue 7 May
Each submission covers everything since the start of your accounting period, so the fourth one covers the full year. The tax return itself is separate and is still due by 31 January the following year.
What is required
Three obligations, not one.
Most of the anxiety around Making Tax Digital comes from people assuming it is one enormous change. It is three fairly ordinary ones.
- Ongoing
Keep digital records
Your income and expenses live in software, or in a spreadsheet connected to software. Paper records and a shoebox no longer satisfy the requirement on their own.
- Four times a year
Send four quarterly updates
Summaries of your income and allowable expenses for each quarter, submitted from that software directly to HMRC.
- 31 January
File your return and pay as usual
The final return still follows, and the tax is still due by 31 January. This part has not changed.
Where I come in
The whole process, handled.
Making Tax Digital is exactly the sort of process that is tedious for you and routine for me.
I am a certified QuickBooks ProAdvisor, so getting you onto compatible software and keeping the records in a state HMRC will accept is ordinary work here rather than a special project.
- Self-Assessment MTD SubmissionsTotal peace of mind in the face of big changes.from £80/qtr
- Self-Assessment Tax ReturnMaximise your tax efficiency and remove the January panic.from £200/yr
- QuickBooks ProAdvisor SupportSave hours of frustration and unlock the full power of your software.from £50/mo
Keep any of your books with me and the MTD submissions drop to £60 a quarter.
Questions
What people ask about MTD.
Does Making Tax Digital apply to me?
It applies to sole traders and landlords, and it is being introduced in stages based on your gross income from self-employment and property. If your income is above the current threshold you will be brought in; if it is below, you will not be yet. Because the thresholds step down over several years, the honest answer for most people is not whether but when. Send me your figures and I will tell you which stage you fall into.
What actually changes?
Two things. You have to keep your records digitally, in software rather than on paper or in a standalone spreadsheet. And you have to send HMRC four updates a year on top of your tax return. The tax return itself does not go away, and neither does the January payment date.
Do the quarterly updates replace my tax return?
No, and this is the most common misunderstanding. The quarterly updates are summaries sent through the year. You still file a tax return afterwards, and the tax is still due by 31 January as it always was.
Do I have to use a particular piece of software?
It has to be software HMRC recognises as compatible, but there is a lot of choice. QuickBooks, Xero and Sage are the most widely used. If you are a landlord, something built for property such as Hammock may suit you better. If you are comfortable in a spreadsheet, bridging software can connect what you already do to HMRC rather than making you start again.
I have never used accounting software. Is this going to be awful?
It is usually less painful than people expect, and for a lot of businesses it ends up being an improvement rather than just an obligation. Being able to see where you actually are, mid-year, tends to be worth having. As a certified QuickBooks ProAdvisor, getting people set up properly on software is a large part of what I do.
Not sure whether this applies to you?
Book a free 30-minute consultation, tell me your figures, and I'll tell you which stage you fall into and what you need to do about it.
Free 30-minute consultation. No obligation.