17/10/2026
Making Tax Digital for Income Tax: who needs to act next
- Who it affects
- Sole traders and landlords with qualifying income over £20,000
- Action needed
- Check with us
Making Tax Digital for Income Tax has applied since 6 April 2026 to sole traders and landlords whose qualifying income was over £50,000. The next group joins on 6 April 2027, and the threshold falls again in April 2028. If your self-employment and rental income together come to more than £20,000, it is worth checking now when the rules will apply to you.
What has changed
Sole traders and landlords in scope now keep their records in compatible software and send HMRC a summary of their income and expenses every quarter. The tax return for the year is then submitted from the same software by 31 January after the tax year ends.
A quarterly update is a running summary, not a tax return. It does not create a tax bill on its own, and year-end adjustments and reliefs are still dealt with in the tax return.
Who needs to act, and when
| If your qualifying income was over | In the tax year | You need to use Making Tax Digital 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 gross income (sales, or turnover) from self-employment and property added together, before expenses. HMRC uses this figure, not your profit. For example, if you had £18,000 of self-employed income and £14,000 of rent in 2025 to 2026, your qualifying income is £32,000, so you would need to start on 6 April 2027. If you own a rental property jointly, only your share of the rent counts. If you are UK resident, income from self-employment or property outside the UK counts as well.
HMRC writes to people it expects to be in scope. If no letter arrives, it is still your responsibility to check. Some people are exempt, for example those who cannot reasonably use digital tools. Partnerships will join later, but HMRC has not yet set a date.
Deadlines and penalties
Quarterly updates are due by 7 August, 7 November, 7 February and 7 May. For the 2026 to 2027 tax year, HMRC has confirmed there are no penalties for a late quarterly update. From the 2027 to 2028 tax year, each missed deadline earns a penalty point, and reaching four points brings a £200 penalty. That applies to everyone joining in April 2027 from their first quarter.
What to do now
If your 2025 to 2026 qualifying income is likely to be over £30,000:
- Confirm the figure when your 2025 to 2026 tax return is prepared. That return is due by 31 January 2027 and is filed in the usual way.
- Choose compatible software and move your records into it before 6 April 2027.
- Sign up for Making Tax Digital before your start date, or ask your accountant to sign you up. You can only sign up once you are registered for Self Assessment and have filed a tax return in the last two years, so if 2025 to 2026 is your first return, file it before you try.
If you would like us to check whether and when this applies to you, or to look after your quarterly updates, please get in touch.
Source: Find out if and when you need to use Making Tax Digital for Income Tax, Work out your qualifying income, Penalties for Making Tax Digital for Income Tax, Sign up for Making Tax Digital for Income Tax, HMRC: quarterly updates and dates, HMRC manual SALF910