The short version
Making Tax Digital for Income Tax (MTD) is HMRC's new way for sole traders and landlords to report their income. Instead of one tax return a year, you:
- keep digital records of your self-employment and property income and expenses,
- send a quarterly update (a summary of those records) four times a year, and
- finish the year with a tax return by 31 January, all from software that works with MTD.
A quarterly update is a summary of your figures, not a tax bill. HMRC receives totals for each category, not your individual receipts or invoices.
Who it's for
MTD applies to individuals with income from self-employment, property, or both, once their qualifying income (the total of that income before expenses) goes over a threshold. It's being introduced in stages:
| MTD starts on | If qualifying income was over | Based on your tax return for |
|---|---|---|
| 6 April 2026 | £50,000 | 2024–25 |
| 6 April 2027 | £30,000 | 2025–26 |
| 6 April 2028 | £20,000 | 2026–27 |
Income from a job, pensions, savings, dividends or your share of a partnership doesn't count towards the threshold. Some people are exempt: see MTD exemptions.
What changes
Digital records
For every bit of income and every expense you record the amount, the date and the category. The categories are the same ones used on the Self Assessment pages today. A spreadsheet is fine, as long as it's linked digitally to software that can send your updates.
Quarterly updates
Four times a year you send HMRC the totals by category. Deadlines are 7 August, 7 November, 7 February and 7 May. Each update covers the tax year so far, so you can correct an earlier quarter in a later one. Read quarterly updates explained.
Your tax return
After the year ends you add any other income, make year-end adjustments and submit your tax return through your software, still by 31 January.
What stays the same
- The income you're taxed on and the expenses you can claim.
- The 31 January deadline for your tax return.
- The need to keep receipts, invoices and bank records.
Do I have to pay for software?
You'll need software that works with MTD, but it doesn't have to cost anything: HMRC's software finder lets you filter for free products. If you like your spreadsheet, bridging software can read it and send your updates.
How many people are already doing it?
By August 2026, more than 570,000 people had signed up and 436,000 had sent their first quarterly update (HMRC, 12 August 2026). About 1,077,000 more sole traders and landlords join on 6 April 2027 (HMRC, 5 October 2026).
What to do now
- Find your start date with the checker below.
- Choose software: free, paid, or a spreadsheet plus bridging software.
- Start keeping digital records before your first quarter, so the habit is in place.
- Get reminders for each deadline from our deadline calendar.
- GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax
- GOV.UK: Create digital records (Use Making Tax Digital for Income Tax)
- GOV.UK: Send quarterly updates (Use Making Tax Digital for Income Tax)
- GOV.UK: Submit your tax return (Use Making Tax Digital for Income Tax)
- GOV.UK news, 12 August 2026: 436,000 sole traders and landlords make their tax digital
This guide explains HMRC's published rules without the jargon. It's information, not tax advice, and it was accurate when we checked it on 19 October 2026. For your own situation, check your HMRC online account or speak to an accountant.