Updated 21 October 2026
Making Tax Digital for the Self-Employed and Landlords
Who needs to use it now, what changes in April 2027 and how to keep your records and reporting on track.
Making Tax Digital for Income Tax is already in place for the first group of sole traders and landlords. If it applies to you, you need compatible software, digital records and quarterly updates, as well as an annual tax return.
The practical change is keeping your bookkeeping up to date throughout the year. You do not pay your tax bill every quarter simply because you send quarterly updates.
Who needs to use Making Tax Digital?
Your start date depends on your qualifying income in the relevant tax year, not just what you earn this month. HMRC is introducing the rules in stages:
Qualifying income over £50,000 in 2024/25. This first group already needs to use MTD for Income Tax, unless an exemption applies.
Qualifying income over £30,000 in 2025/26. Check your figures now so you have time to choose software and establish a regular bookkeeping routine.
Qualifying income over £20,000 in 2026/27. The lower threshold brings more sole traders and landlords into the system.
Qualifying income is your combined income from self-employment and property before expenses. It is not your profit, and employment income, dividends and pensions do not count towards this threshold. For example, £35,000 of sole-trader turnover plus £18,000 of rental income gives qualifying income of £53,000.
Exemptions and special circumstances can affect whether the rules apply. Use HMRC’s qualifying-income guidance, or ask us to help check your position. Do not assume you are outside the rules just because you have not received a letter.
What do you need to do during the year?
- Keep digital records. Record your self-employment and property income and expenses in compatible software. If you use spreadsheets, you may need bridging software to send the information to HMRC.
- Send quarterly updates. Your software uses your records to produce an income-and-expense summary for each sole-trader or property business. Updates are cumulative, covering the tax year so far.
- Complete your annual tax return. Check the full-year figures, make any adjustments, and include other income, reliefs and allowances through your software. Quarterly updates do not replace this final annual step.
Your tax-payment arrangements continue as usual. MTD quarterly updates are summaries, not four separate tax returns or four new tax-payment deadlines.
When are the quarterly updates due?
For the 2026/27 tax year, the update deadlines are:
The first and second quarterly updates. The next deadline, at the time of this update, is 7 November 2026.
The third and fourth quarterly updates. The annual MTD tax return for 2026/27 is then due by 31 January 2028.
These are not simply one month after each quarter ends. Check the periods shown in your software, particularly if you use calendar quarters. HMRC explains both options in its quarterly-update guidance.
If you still need to submit a 2025/26 Self Assessment return, its online filing deadline remains 31 January 2027. Do not confuse that return with the first MTD year.
A manageable next step
Start with your qualifying income and the correct start date. Then check whether your current bookkeeping software can keep the records, send updates and complete your annual return. A regular monthly review of invoices, expenses and bank transactions makes the quarterly deadlines easier to manage.
Choosing software does not sign you up for MTD. You or your authorised agent also need to complete the HMRC sign-up process.
If you are already within MTD but have not started, check your position promptly rather than waiting for the next deadline. If you join in April 2027, use the coming months to get your records and software ready.
MTD can also prompt a wider review of your business structure, but becoming a limited company is not automatically the right response. Compare the tax, costs and responsibilities for your circumstances. Our self-employed versus limited company guide explains the main differences, and our Xero bookkeeping guide covers software setup and regular checks.
This is general guidance, checked against HMRC information in October 2026. Individual circumstances and exemptions can change the position. See HMRC’s MTD overview for the official guidance.