The one-paragraph answer
MTD for Income Tax replaces the once-a-year paper-and-spreadsheet routine for many sole traders and landlords. If your qualifying income is over the threshold, you keep digital records of self-employment and property income and expenses, send a quarterly update to HMRC from compatible software, and submit your tax return from software by 31 January. Tax is still paid by 31 January after the tax year.
Who it affects
- Sole traders and landlords who are registered for Self Assessment and have income from self-employment, property, or both.
- Only if their qualifying income (turnover before expenses from self-employment and property combined) is over the threshold. Wages (PAYE), a partnership profit share, dividends and pensions do not count.
- Partnerships will need to use it in future; HMRC has not yet set the timeline.
- Anyone with qualifying income of £20,000 or less is automatically exempt. Other exemptions include being digitally excluded.
When it starts
| Qualifying income over | Measured on | Must use MTD from |
|---|---|---|
| £50,000 | 2024 to 2025 tax return | 6 April 2026 |
| £30,000 | 2025 to 2026 tax return | 6 April 2027 |
| £20,000 | 2026 to 2027 tax return | 6 April 2028 |
HMRC writes to people it thinks are over the threshold, but GOV.UK is clear that you must still check yourself even without a letter. From September 2026 HMRC started signing up anyone who needed MTD for 2026 to 2027 and had not signed themselves up.
What actually changes
Digital records
Each self-employment and property transaction recorded in software (or a spreadsheet linked by bridging software), with the amount, date and category.
Four quarterly updates
Summaries of income and expenses, not tax returns. Cumulative from 6 April, due 7 August, 7 November, 7 February and 7 May. Nil updates are still due.
Tax return from software
Other income is added and the return is submitted from compatible software by 31 January after the tax year. Tax is still due by 31 January.
The next deadline
7 November 2026: the second quarterly update of 2026 to 2027, covering 6 April to 5 October 2026 (or 1 April to 30 September for calendar periods). It applies to the £50,000 cohort that started on 6 April 2026, and to volunteers. 7 November 2026 is a Saturday. See the full 2026–27 deadline table.
HMRC will not give penalty points for late quarterly updates in 2026 to 2027. From 2027 to 2028 each late update earns a point, and 4 points means a £200 penalty. Penalty points still apply to late tax returns.
What it costs
Compatible software is commercial, though free versions exist. Of the 103 products on HMRC’s software finder on 27 October 2026, 18 sole-trader products list a free version. HMRC does not recommend any product. Compare them in our software tracker or read MTD software options for sole traders.
Sources (GOV.UK, checked 27 Oct 2026)
Common questions
What is Making Tax Digital for Income Tax?
It is HMRC’s system for sole traders and landlords over an income threshold: keep digital records, send quarterly updates from compatible software and submit the tax return from software by 31 January.
Who has to use Making Tax Digital for Income Tax?
Sole traders and landlords registered for Self Assessment whose qualifying income (turnover before expenses from self-employment and property) was over £50,000 on the 2024 to 2025 return (from 6 April 2026), over £30,000 on the 2025 to 2026 return (from 6 April 2027) or over £20,000 on the 2026 to 2027 return (from 6 April 2028).
When is the next MTD quarterly update deadline?
7 November 2026, for the period 6 April to 5 October 2026 (or 1 April to 30 September 2026 for calendar update periods).
Is a quarterly update a tax return?
No. GOV.UK describes quarterly updates as summaries of income and expenses. The tax return is still submitted once a year, by 31 January after the tax year, using software.