Prepare for Making Tax Digital for Income Tax
Sole traders and landlords with an income over £50,000 will be required to use Making Tax Digital (MTD) for Income Tax from 6 April 2026.
Making Tax Digital for Income Tax goes live on Monday 6 April 2026. You can prepare now to get ready for the new requirement to keep digital records and submit quarterly updates on your income and expenses.
This change will affect around 27,000 sole traders and landlords in Northern Ireland with a turnover of more than £50,000 from self-employment and property. Most customers will receive a letter from HM Revenue & Customs (HMRC) confirming they need to join, which also explains what they need to do and includes a QR code linking to further guidance.
People with a tax agent should speak to them about preparing.
What does Making Tax Digital for Income Tax mean?
Making Tax Digital for Income Tax means that eligible individuals will need to use compatible software to keep digital records and report their income by sending four simple quarterly updates of their income and expenses, and submit their tax return to HMRC.
Digital records
By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time, allowing them to spend more time focusing on their business activities.
Quarterly updates
Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting, and help businesses stay on top of their finances and avoid the last-minute rush. For most, the first quarterly update under MTD for Income Tax will cover the period 6 April to 5 July 2026 and will need to be submitted by Friday 7 August 2026.
Tax returns
Those joining MTD for Income Tax in April 2026 will still file their Self Assessment return for the 2025 to 2026 tax year in the usual way by 31 January 2027. The first tax return that most customers will submit using their MTD-compatible software, covering 2026 to 2027, will be due by 31 January 2028.
Penalties for late submissions
A new points-based system for late submissions applies, where a £200 fine is only triggered once four points are reached, meaning the occasional slip-up will not result in an immediate fine. No penalty points will be issued for late quarterly updates for the 2026 to 2027 tax year – though points will still apply to late tax returns.
Who is required to use Making Tax Digital for Income Tax?
There will be a phased-in approach to Making Tax Digital for Income Tax.
- From April 2026, individuals with qualifying income above £50,000 will need to keep digital records, use MTD-compatible software, and submit quarterly summaries of their income and expenses to HMRC.
- From April 2027, those with a qualifying income above £30,000 will also be required to use MTD for Income Tax.
- From April 2028, the threshold will then decrease to £20,000.
Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted.
Find out if and when you need to use Making Tax Digital for Income Tax.
Webinars to help with Making Tax Digital for Income Tax
HMRC is hosting several webinars to help people understand their obligations for Making Tax Digital for Income Tax as the new changes are introduced in April 2026.
View the latest HMRC tax webinars.
Other support to help you prepare for MTD
HMRC is providing a range of free support to help people prepare, including:
Free software options for MTD
Free software options are available, with a range of paid packages also on offer to suit different needs. Once all your digital records of income and expenses have been created, the software will use them to generate your quarterly update.
At the end of a tax year, those within MTD for Income Tax will still need to file a tax return by the following 31 January - but the software will already hold the information from the quarterly updates, meaning no last-minute hunt for records or receipts.
Exemptions from MTD
Those who genuinely cannot use digital tools can apply for an exemption from Making Tax Digital.
Find out if you can get an exemption from Making Tax Digital for Income Tax.
First published 24 April 2025