Making Tax Digital for Income Tax: what sole traders and landlords need to know
21 September 2026 · 3 min read · SME Outsourcing
From April 2026 many self-employed people and landlords must keep digital records and send HMRC quarterly updates. Here is who is affected, when, and what changes.
Making Tax Digital (MTD) for Income Tax is the biggest change to Self Assessment in a generation. Instead of one tax return a year, affected sole traders and landlords keep their records digitally and send HMRC an update every quarter through compatible software, then finalise the year with a final declaration.
Who has to use it, and from when
HMRC phases it in by "qualifying income" — broadly your gross income from self-employment and property before expenses:
- From 6 April 2026 if your qualifying income was more than £50,000 in the 2024 to 2025 tax year.
- From 6 April 2027 if it was more than £30,000 in the 2025 to 2026 tax year.
- From 6 April 2028 if it was more than £20,000 in the 2026 to 2027 tax year.
If you are below the threshold you carry on with the usual Self Assessment return for now.
What changes in practice
- Digital records. Income and expenses for your self-employment and property businesses must be recorded in software (or spreadsheets linked to software) that can talk to HMRC.
- Quarterly updates. For a standard tax-year basis the update periods and deadlines are: 6 April to 5 July, due 7 August; 6 April to 5 October, due 7 November; 6 April to 5 January, due 7 February; 6 April to 5 April, due 7 May the following tax year. Each update is cumulative — it covers the tax year to date, so corrections simply flow into the next one.
- A final declaration replaces the tax return at the end of the year, confirming the figures and claiming any reliefs.
What it does not change
The amount of tax you pay is worked out in the same way, and the payment dates stay the same: 31 January, with payments on account on 31 January and 31 July where they apply.
How to prepare
- Check which year you fall into using your gross self-employment and property income.
- Move your bookkeeping onto MTD-compatible software well before your start date, so the first quarter is not also your first attempt.
- Separate business and personal bank transactions if you have not already.
- Decide who will send the quarterly updates — you, or your accountant.
SME Outsourcing sets clients up on compatible software, keeps the records, sends the quarterly updates and files the final declaration, so the change is invisible to you. Book a free initial assessment and we will tell you exactly when MTD starts for you and what it involves.
Sources: GOV.UK — Check if you need to use Making Tax Digital for Income Tax · GOV.UK — Send quarterly updates · GOV.UK — Self Assessment deadlines