Making Tax Digital for Income Tax: 2026 to 2028
Making Tax Digital for Income Tax: who has been in scope since 6 April 2026, who joins at £30,000 in April 2027, the quarterly deadlines and the software.
Mathias Popp
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In short
Since 6 April 2026, sole traders and landlords with more than £50,000 of qualifying income keep digital records and send HMRC quarterly updates through compatible software. The threshold falls to £30,000 on 6 April 2027 and £20,000 on 6 April 2028.
Qualifying income is self-employment and property turnover before expenses. HMRC used your 2024 to 2025 return for the April 2026 start and uses your 2025 to 2026 return, due 31 January 2027, for April 2027.
The first quarterly update for 2026 to 2027 was due on 7 August 2026. HMRC does not give penalty points for late quarterly updates in 2026 to 2027, but a late final declaration and late payment are still penalised.
From September 2026 HMRC signs up anyone in scope for 2026 to 2027 who has not signed up, using only the details it already holds.
What Making Tax Digital for Income Tax is
Making Tax Digital for Income Tax (often shortened to MTD ITSA) is HMRC's requirement that self-employed people and landlords keep their business records digitally and report income and expenses to HMRC every quarter through software that connects to HMRC's systems. It follows Making Tax Digital for VAT, which has applied to all VAT-registered businesses since April 2022.
The rules and dates on this page come from HMRC's sign-up guidance, last updated on 24 August 2026.
Who has to use it, and from when
From | Qualifying income above | Who |
|---|---|---|
6 April 2026 | £50,000 | Sole traders and landlords |
6 April 2027 | £30,000 | Sole traders and landlords |
6 April 2028 | £20,000 | Sole traders and landlords |
Qualifying income is the total of your self-employment turnover and your property income before any expenses, taken from your 2024 to 2025 return for the April 2026 start, your 2025 to 2026 return for April 2027, and your 2026 to 2027 return for April 2028. A consultant with £45,000 of fees and a flat bringing in £8,000 of rent has £53,000 of qualifying income and has been in scope since April 2026. Partnerships will join on a date HMRC has not yet set. Limited companies are outside it, and a company director's salary and dividends do not count.
What changes in practice
Digital records. Every business income and expense transaction has to be recorded in software or a spreadsheet that links to software. A bag of receipts typed up in January does not qualify.
Quarterly updates. Four times a year, a summary of income and expenses for the quarter is sent to HMRC from the software. The standard quarters run from 6 April, with updates due by the 7th of the month after each quarter ends: 7 August, 7 November, 7 February and 7 May. HMRC will not give penalty points for late quarterly updates in the 2026 to 2027 tax year.
A final declaration. After the tax year ends you confirm the year's figures, add any other income such as employment or savings, and make claims and adjustments. This replaces the Self Assessment return, and the deadline stays at 31 January.
Compatible software. HMRC does not provide the software. Use a product from HMRC's software finder, or bridging software that connects a spreadsheet. HMRC lists free products for simple tax affairs.
What to do now
If you are in scope for 2026 to 2027
Check you are signed up and that your software has sent the 7 August update. The next one is due by 7 November 2026. If you have not signed up, do it before HMRC does, so the details and the software are yours.
If your income is over £30,000
You join on 6 April 2027 if your 2025 to 2026 return shows qualifying income over £30,000.
Check your qualifying income on that return. Add self-employment turnover and property income before expenses.
Pick the software and connect your business bank account to it, so transactions arrive without typing.
Separate business and personal spending. With a dedicated business account, the digital record is the bank feed.
Decide who keeps the records. You, a bookkeeper, or a service. Quarterly deadlines mean the books have to be current every three months.
Sign up, or have your agent sign you up. You still file a Self Assessment return for 2026 to 2027.
What it means for your bookkeeper or accountant
For a business in scope, the bookkeeping has to be current four times a year. Ask any provider three questions: is the bookkeeping done at least quarterly, is it done in compatible software, and who submits the quarterly updates. Our guide to UK bookkeeping costs compares the monthly options.
Where Balance fits
Balance is an AI-powered accounting firm in London and Copenhagen. It keeps the books continuously inside your existing Xero, e-conomic or Business Central, so each quarter's figures are already reconciled when the update is due, and a named ACA-qualified accountant reviews and signs them off. Fees are one agreed monthly price from £350 per entity. If you are a sole trader with a few dozen transactions a month, compatible software with a bank feed is probably enough, and we will say so.
If you would rather not do any of this yourself, see what Balance includes or book a call.
FAQ
What is Making Tax Digital for Income Tax?
HMRC's requirement that sole traders and landlords keep digital records and send quarterly updates of income and expenses through compatible software, followed by a final declaration for the year.
What are the penalties for Making Tax Digital for Income Tax?
Late quarterly updates earn no penalty points in the 2026 to 2027 tax year. A late final declaration or late payment is penalised as a Self Assessment return is.
What counts as qualifying income?
Your total turnover from self-employment and income from property, before expenses, taken from the tax return for the previous year. Employment income, dividends and savings interest do not count.
Do limited companies need to use Making Tax Digital for Income Tax?
No. It applies to individuals with self-employment or property income. A company director's salary and dividends do not count. VAT-registered limited companies already use Making Tax Digital for VAT.
What happens if I do not sign up?
From September 2026 HMRC signs up anyone in scope for 2026 to 2027 who has not done it themselves, using only the details it already holds, which may miss changes since your last return. Signing up yourself lets you check the details and choose the software.
Can I still use a spreadsheet?
Yes, if it is linked to HMRC through bridging software. The record has to be digital and the update has to travel from the record to HMRC without retyping.
What are the quarterly update deadlines?
For the standard quarters starting 6 April, updates are due by 7 August, 7 November, 7 February and 7 May. The final declaration is due by 31 January after the tax year ends.
More answers are on our FAQ page.