Making Tax Digital for Income Tax – Key Facts, Deadlines, and What to Do Next

When will MTD be compulsory for sole traders and landlords?

The tax year you need to switch to this system will depend on your total annual income from self-employment and property.

• 6 April 2026, for those with an annual gross income of over £50,000 from self-employment and property letting
• 6 April 2027, for those with an annual gross income of more than £30,000 and up to £50,000 from self-employment and property letting
• 6 April 2028, for those with an annual gross income of more than £20,000 and up to £30,000 from self-employment and property letting

If it is not a legal requirement for you to switch to MTD from 2026, you can choose to do so rather than waiting until your income level makes it compulsory.

What are the main changes?

You will need to submit quarterly updates to HMRC, and then a final tax return by 31 January each year.

The updates and tax return will need to be submitted digitally via specialist software.

How will that work?

Each quarter, you will need to submit updates to the HMRC to declare all income and expenses for that period. The digital record-keeping system you will need to use will automatically create the report.

If you are self-employed and a landlord, with two separate income streams, you will need to submit an update for each income source.

You can choose whether you tie into the month-end or the official tax year, with the submission deadline being the 7th of the following month.

Based on the Tax Year Based on the month-end

6 April to 5 July (due by 7 August)

6 April to 5 October (due by 7 November)

6 April to 5 January (due by 7 February)

6 April to 5 April (due by 7 May)

1 April to 30 June (due by 7 August)

1 April to 30 September (due by 7 November)

1 April to 31 December (due by 7 February)

1 April to 31 March (due by 7 May)

You will then submit a final report by 31 January with any adjustments needed. This report will also be done through specialist software and will replace HMRC’s free on-line self-assessment tax return filing service.

The payment dates remain the same and will be due on 31 January and 31 July each year.

What do I need to do?

1. Check your income to see what tax year you are legally obligated to switch to MTD.

2. Start preparing for the switch by moving over to digital records (a spreadsheet is fine).

3. You will need to use software that complies with Making Tax Digital for Income Tax. The software will allow you to create, store and submit records of your income and expenses. HMRC will have various authorised partners who can provide the software. The software you choose will depend on your budget and your business needs.

Will HMRC contact me when I need to switch?

All self-assessments filed before 31 January 2026 will be assessed by HMRC to identify those who need to follow the new MTD rules from April 2026. If your gross income from self-employment and/or property is more than £50,000, you will receive a letter in February to notify you that you will need to comply with MTD from April 2026.

Plan now!

If you wait for HMRC to tell you, you will not have much time to prepare.

Start thinking now about how you can keep digital records. Do you have the skills, time and software needed? Do you need to invest in training or additional support?

If you are already using software for Making Tax Digital for VAT, does it cover Making Tax Digital for Income too?

More information on Making Tax Digital for sole traders and landlords

There is a lot of information on GOV.UK about Making Tax Digital for Income. The Government website is being updated regularly and is the best place on-line to look for information.

How can we help?

We are happy to explain the process step by step and see how we can help with the quarterly and annual submission. Please give the office a call on 01473 657853 to arrange a convenient time to discuss how we can support you and your business.