Making Tax Digital for Income Tax: the 2026 guide for the self-employed and landlords

What are the Making Tax Digital deadlines?

There are four quarterly update deadlines a year, each on the 7th of the month after the update period ends. The tax return deadline does not move: it is still 31 January after the end of the tax year, and you submit it through your Making Tax Digital software. You must still send your quarterly updates before you can submit the return.

Each update covers the tax year so far, not just the latest three months. Software uses standard periods by default; if your accounting period runs 1 April to 31 March you can use calendar periods. If you had no income or expenses in a period you must still send the update. For 2026/27 HMRC is not applying penalty points for late quarterly updates, but penalty points still apply to late tax returns.

Source: GOV.UK: Send quarterly updates; Submit your tax return.

What “qualifying income” actually means

Two things people get wrong immediately — and both put real people unexpectedly in scope.

1. Qualifying income is gross, and it is combined. It is your total gross income from self-employment and property before any expenses — not profit. A landlord with £30,000 of rent and £29,000 of self-employed turnover is over the £50,000 line and in scope from April 2026, even though neither source alone would put them there (GOV.UK guidance). This catches people with multiple small income streams who never thought of themselves as “high earners.”
2. The test is based on a past return. If your 2024/25 gross income was over £50,000, you are in MTD from April 2026 — even if your income has since dropped. The phase-in date is locked to the figure on the relevant earlier Self Assessment return (GOV.UK).

Read the full who-is-in-scope guide →

What changes in practice — the new quarterly cycle

The old once-a-year reporting rhythm is replaced by three connected obligations:

• Digital record-keeping. Income and expenses recorded digitally in compatible software — not paper, not standalone spreadsheets unless they are bridged to compatible software. Records kept as you go, not assembled in January.
• Quarterly updates. A summary of income and expenses submitted each quarter through compatible software. The update is summary-level reporting from your digital records, not a full set of accounts (GOV.UK).
• Final declaration. After year-end, you confirm the figures, add any other income (employment, savings, dividends), and finalise your tax — replacing the annual Self Assessment return. The separate End-of-Period Statement requirement has been removed (Deloitte Taxscape summary).

Two practical points often missed: a person with both a sole trade and property gets two sets of quarterly updates; and the payment dates for your tax bill do not change — only the reporting cadence does. The cultural shift is real, though: bookkeeping becomes a quarterly discipline, not an annual scramble.

Read the full quarterly-cycle breakdown →

What the penalty regime looks like — and what the soft landing does not cover

There are no penalties for missing quarterly update deadlines in 2026/27, but the updates still have to be submitted before you can file the tax return. For tax years after 2026/27, MTD uses a points-based late-submission system: one penalty point per missed quarterly update or tax return deadline. At four points, HMRC charges £200, with a further £200 for each later miss (GOV.UK).

There is a soft landing for the first year: April 2026 joiners receive no penalty points for late quarterly updates during 2026/27. The grace period is real but narrow:

Read the full penalty + soft-landing guide →

MTD for landlords specifically

Landlords are squarely in scope. The points landlords most often get wrong:

• It is gross rent, not profit. A mortgaged landlord with thin margins can still be well above the threshold on gross rents alone.
• Combined with other income. Rent plus any self-employment is added together against one threshold (LITRG).
• Your share counts. For jointly owned property, it is your share of the income that goes toward your figure.
• Quarterly cadence. Rental income and allowable expenses recorded digitally and reported every quarter — a real change for landlords used to handing a shoebox of figures to an accountant once a year.

Read the landlord-specific guide →

MTD for sole traders

For sole traders, the rules are the same shape as for landlords, but two situations catch people out: combined-income totals (a sole trade plus side-let property), and the partnership exemption (general partnerships are not yet mandated) (GOV.UK).

Read the sole-trader guide →

Does Making Tax Digital apply to limited companies?

Making Tax Digital for Income Tax applies to individuals with self-employment or property income, not to a limited company's own profits. A company pays Corporation Tax, which is outside this service. A company director is not pulled in by the company: dividends, including those from your own company, and PAYE employment income do not count towards qualifying income.

You can still be in scope personally. If you are a director who also runs a sole trade or lets property in your own name, your gross self-employment and property income is added up against the same £50,000, £30,000 and £20,000 thresholds.

Limited companies are already affected by Making Tax Digital for VAT. All VAT-registered businesses, whatever their legal form, keep VAT records and file VAT Returns through compatible software. GOV.UK has not announced a start date for Making Tax Digital for Corporation Tax; the only official publication is a 2021 consultation, so check GOV.UK before relying on any date you read elsewhere.

See who is in scope.

Sources: GOV.UK: Work out your qualifying income; Making Tax Digital for VAT; Making Tax Digital for Corporation Tax.

Choosing MTD-compatible software

To comply, you must use HMRC-recognised compatible software to keep digital records and submit quarterly updates. Compatible software must connect directly to HMRC, support cumulative quarterly updates and the final declaration, and handle all your income streams. You can use one all-in-one product, or bridging software that links to digital records held elsewhere (GOV.UK).

Compare your software options →

How to prepare before your start date

A practical, do-it-now sequence — useful whether your start date is April 2026, April 2027, or April 2028:

1. Confirm your phase. Check your qualifying income on the relevant past return against the thresholds (£50k → 2026, £30k → 2027, £20k → 2028) using the GOV.UK eligibility tool.
2. Decide your approach. All-in-one software, bridging software, or hand it to an accountant. Decide who is doing what before you sign up.
3. Go digital early. Start recording income and expenses digitally now — don't wait for the start date. The habit is the hard part, not the tech.
4. Sign up and authorise. Register for the service and authorise your software or agent before your first quarterly update is due.
5. Do a dry run. Simulate a quarterly update before it counts, so the first real one is not a panic.

Read the full preparation checklist →

Useful free tools while you're here

Three calculators in the RR free-tools suite that pair naturally with MTD planning:

• Self Assessment tax calculator — model your 2026/27 bill before the year ends.
• Salary vs dividend optimiser — if you are also a limited-company director, this maps the trade-offs MTD doesn't cover.
• Take-home pay calculator — for the employment side, if you have a mixed income mix.