General information only, not financial advice. Grow & Guard is not authorised by the Financial Conduct Authority to give advice. It is not a personal recommendation. Check details with the provider and consider independent advice before making financial decisions.
The short version
- Making Tax Digital (MTD) for Income Tax started on 6 April 2026 for sole traders and landlords whose qualifying income was over £50,000 in the 2024 to 2025 tax year.
- If you use standard update periods, your second quarterly update covers 6 April to 5 October 2026 and HMRC must receive it by 7 November 2026.
- For the 2026 to 2027 tax year, HMRC says it will not give penalty points for late quarterly updates. You still have to send every update before you can file your return through your software.
Who has to use Making Tax Digital for Income Tax now
According to HMRC's eligibility guidance, you need to use MTD for Income Tax if you are a sole trader or landlord registered for Self Assessment, you have income from self-employment or property (or both), and your qualifying income is over the threshold for the relevant tax year.
| Qualifying income over | Assessed on the tax year | You need MTD from |
|---|---|---|
| £50,000 | 2024 to 2025 | 6 April 2026 |
| £30,000 | 2025 to 2026 | 6 April 2027 |
| £20,000 | 2026 to 2027 | 6 April 2028 |
Qualifying income is your total turnover from self-employment and property, before expenses. It is not your profit. HMRC's qualifying income guidance gives the example of someone with £25,000 of rental income and £27,000 of self-employment income: their qualifying income is £52,000, so they are over the £50,000 threshold even though each income on its own is below it.
PAYE employment income, dividends, pensions and your share of a partnership's profit do not count towards qualifying income.
HMRC writes to people it thinks need to sign up, but its guidance is clear that it is still your responsibility to check, even if no letter arrives. Its online checker also covers exemptions, for example if you are digitally excluded.
What a quarterly update actually is
A quarterly update is not a tax return. HMRC describes it as a summary: your software adds up the digital records you have kept and sends HMRC totals for each income and expense category. HMRC does not receive your individual receipts or invoices.
Each update is cumulative. Your November update covers the whole tax year so far, from 6 April to 5 October, not just the last three months. If you spot a mistake from the summer, correct the record in your software and the fix goes into this update. Accounting and tax adjustments come at the end of the year, not now.
If you had no income and no expenses in the period, you still need to send the update to tell HMRC so. You need a separate update for each self-employment business and for your property business.
The deadlines for the 2026 to 2027 tax year
| Update covers (standard periods) | Deadline |
|---|---|
| 6 April to 5 July 2026 | 7 August 2026 |
| 6 April to 5 October 2026 | 7 November 2026 |
| 6 April 2026 to 5 January 2027 | 7 February 2027 |
| 6 April 2026 to 5 April 2027 | 7 May 2027 |
If your accounting period runs from 1 April to 31 March, you can choose calendar update periods instead (for example 1 April to 30 September). The deadlines are the same. HMRC says you must choose this in your software before you send your first update and cannot change it for the rest of the tax year.
You can send an update any time after the period ends, up to and including the deadline day. 7 November 2026 is a Saturday, so do not leave it until the last minute if you rely on an accountant or bookkeeper who works weekdays.
What happens if you are late
MTD uses a points-based system for late submissions. For the 2026 to 2027 tax year, HMRC says it will not apply penalty points for late quarterly updates. That is a soft landing, not a pass: you must still send all your quarterly updates before your software will let you submit your tax return for the year, and penalty points still apply to late tax returns.
From the 2027 to 2028 tax year, each late quarterly update earns a point, and reaching four points means a £200 penalty.
Do not forget your normal return. MTD does not replace the Self Assessment return for the year before you joined. If you started MTD in April 2026, your 2025 to 2026 return still has to reach HMRC online by 31 January 2027, which is also the date to pay any tax you owe, according to GOV.UK.
Getting your records ready this week
HMRC's guidance on creating digital records sets out what each record needs: the amount, the date and the category. If you joined part-way through the year, you need to catch up and create records from 6 April, not from the day you signed up.
- Check your software is authorised. Sign-up includes choosing and authorising compatible software. If you use more than one product, for example a spreadsheet plus bridging software, the records must be digitally linked rather than copied and pasted.
- Bring your bank feed up to date. If your software pulls in bank transactions, HMRC says you may need to add the Self Assessment category and create records for anything that does not appear in full.
- Use simpler categories if you can. If the turnover of a self-employment business, or your total UK property turnover, is under £90,000, HMRC lets you record each transaction simply as income or expense. Landlords still need to flag any expense that is a restricted finance cost.
- Review the totals before you send. Your software shows the year-to-date figures first. After sending, you can see an estimated tax bill, which helps you budget.
- Keep the evidence. You still need bank statements, invoices and receipts, and HMRC says to keep digital records for at least five years after the 31 January filing deadline for the tax year.
Choosing software if you are still on spreadsheets
Spreadsheets are allowed, but you then need digitally linked bridging software to send updates, so many sole traders find one product that does everything simpler. Several business bank accounts now include free MTD tools, and full accounting packages such as XeroAd and FreeAgent cover the whole process. Our guide to accounting software for sole traders compares the options and prices, and our business bank account comparison shows which accounts include MTD tools. HMRC also publishes a list of compatible software.
Next year: the £30,000 threshold
If your qualifying income was over £30,000 in the 2025 to 2026 tax year, you will need MTD from 6 April 2027. HMRC will assess this from the return you file by 31 January 2027, so if you are close, consider starting digital records early or joining voluntarily to practise.
Sources we checked
All checked on 1 November 2026. Prices and features change, so confirm on the provider's site before you buy.
- HMRC: Find out if and when you need to use Making Tax Digital for Income Tax
- HMRC: Use Making Tax Digital for Income Tax, send quarterly updates
- HMRC: Work out your qualifying income for Making Tax Digital for Income Tax
- HMRC: Use Making Tax Digital for Income Tax, create digital records
- GOV.UK: Self Assessment tax returns, deadlines