Since April 2026, some sole traders and landlords have to keep their records in software and send HMRC a summary every quarter. Start by checking whether it applies to you.
In short
Making Tax Digital for Income Tax (MTD) is not a new tax, and the rates haven't changed. What changes is how you keep records and report:
keep digital records in software
send an update every quarter
send your tax return at the end of the year as usual
Do I need to use it?
You need to use it if all three of these apply:
You're registered for Self Assessment.
You have income from self-employment, property, or both.
Your "qualifying income" is over the threshold.
Qualifying income in this tax year
Over
You must start from
2024 to 2025
£50,000
6 April 2026
2025 to 2026
£30,000
6 April 2027
2026 to 2027
£20,000
6 April 2028
The threshold is based on your tax return for the tax year shown in the table. For example, if you start on 6 April 2026, it's based on your 2024 to 2025 tax return.
Partnerships can't use it yet. HMRC will publish a timeline later.
How qualifying income is worked out
Qualifying income is your total income from self-employment and property, before expenses (your turnover). It is not your profit.
Included:
self-employment income
UK property rental income
foreign property income, if you're UK tax resident
Not included:
employment income (PAYE)
your share of partnership profits as a partner
dividends
State Pension and private pensions
For jointly owned property, only your share counts.
Examples:
£25,000 of rental income plus £27,000 of self-employment income gives qualifying income of £52,000, which is over the £50,000 threshold.
A property earns £50,000 a year and you own half of it with one other person. Your qualifying income is £25,000.
What you need to do
Sign up. You need to sign up yourself. From September 2026, HMRC has started signing up people who need to use MTD and haven't signed up. When HMRC does this, it uses only the information it already holds, which may not reflect recent changes.
Keep digital records of your self-employment and property income and expenses, in compatible software.
Send a quarterly update each quarter (see the table below).
Send your tax return at the end of the year and pay by the usual deadline. Quarterly updates don't replace the tax return.
Quarterly update periods and deadlines
Period covered
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: it covers the start of the tax year to the end of the period, not just the last three months.
If you find a mistake, you can correct it in your next update without resending earlier ones.
If your accounting period runs from 1 April to 31 March, consider using calendar update periods, which end on the last day of a month.
Coming up: the second quarterly update for the 2026 to 2027 tax year is due by 7 November 2026.
What happens if you're late
Late quarterly updates or tax returns:
2026 to 2027 tax year: you won't get penalty points for late quarterly updates. You still have to send them, and you need to before you can send your tax return.
From the 2027 to 2028 tax year: you get 1 point for each quarterly update or tax return deadline you miss. At 4 points you get a £200 penalty, then another £200 for each further missed deadline. Points below 4 are removed automatically after 24 months.
Late payment (2026 to 2027 tax year):
paid within 15 days: no penalty
paid between day 16 and day 30: 3% of the tax owed
more than 30 days late: a further 3%, plus a penalty charged daily at an annual rate of 10% from day 31
from the 2027 to 2028 tax year, both 3% charges rise to 4%
Can I apply for an exemption?
If you can't use a computer or the internet to do this, HMRC calls you "digitally excluded", and you can apply for an exemption.
How to apply: phone or write to HMRC's Self Assessment enquiries. Explain your situation and give your National Insurance number, name and address. A friend or family member can apply for you, with your authorisation.
When you'll hear back: HMRC aims to reply within 28 days.
If you're exempt: you don't use MTD, but you still send a normal Self Assessment tax return.
Next steps
Find your 2024 to 2025 and 2025 to 2026 tax returns. Add up your self-employment and rental income before expenses.
If you're over the threshold, make sure you've signed up and chosen compatible software.
Put 7 November in your calendar.
Sources checked: 1 October 2026 · Tax year: 2026 to 2027 · Sources are official GOV.UK pages.
This is general information, not tax advice for your situation. How it applies depends on your full circumstances.