Making Tax Digital for Income Tax: who is in from 2026, 2027 and 2028, and what to do
Making Tax Digital for Income Tax changes how sole traders and landlords report to HMRC. Instead of one tax return a year, you keep digital records and send updates every quarter through software. This guide explains who has to join, when, and what the deadlines are.
This is general information. It is not advice on your own tax position.
Who has to join, and when
HMRC looks at your qualifying income in an earlier tax year. If it is over the threshold, you must start on the date in the same row. (gov.uk: find out if and when you need to use MTD for Income Tax)
| Qualifying income in tax year | Over | You start on |
|---|---|---|
| 2024 to 2025 | £50,000 | 6 April 2026 |
| 2025 to 2026 | £30,000 | 6 April 2027 |
| 2026 to 2027 | £20,000 | 6 April 2028 |
Partnerships will also need to use the service later, but HMRC has not given a timeline yet.
If HMRC finds your qualifying income is above the threshold, it will write to you to confirm when you must start. HMRC checks your qualifying income each year when it reviews your Self Assessment return. (gov.uk)
What counts as qualifying income
Qualifying income is your total income from self-employment and property. It is the amount before expenses, also called turnover. It is not your profit. (gov.uk: work out your qualifying income)
HMRC gives this example: £25,000 from rent plus £27,000 from self-employment makes qualifying income of £52,000. Neither amount is over £50,000 on its own, but the total is.
Who is exempt
You are automatically exempt, with no need to apply, if your qualifying income is £20,000 or less. There are other automatic exemptions too, for example if you had no National Insurance number before the start of the tax year. (gov.uk: exemptions from MTD for Income Tax)
You can apply for an exemption if you are digitally excluded, which means it is not reasonable for you to use software. HMRC's examples include age, health or disability that stops you using a computer, or no internet access at home or work because of where you are. HMRC will not accept reasons like "I always filed on paper", "I do not know accounting software" or "it costs extra time or money". If you are exempt you still file a Self Assessment return.
What you have to do once you are in
The steps on gov.uk: use Making Tax Digital for Income Tax are, in short:
- Choose compatible software and authorise it, or arrange for an agent to act for you.
- Check that MTD for Income Tax has been added to your HMRC online account.
- Keep digital records of your self-employment and property income and expenses.
- Send quarterly updates.
- Make any adjustments, then submit your tax return through the software.
To sign up you must be registered for Self Assessment and have sent a return in the last two years. You keep sending your normal Self Assessment return for the tax year before you start. (gov.uk)
Quarterly update deadlines
Each update covers the tax year so far, from 6 April. (gov.uk: send quarterly updates)
| Update period | Deadline |
|---|---|
| 6 April to 5 July | 7 August |
| 6 April to 5 October | 7 November |
| 6 April to 5 January | 7 February |
| 6 April to 5 April | 7 May |
If your accounting period runs from 1 April to 31 March, you can use calendar periods instead (1 April to 30 June, and so on). The deadlines are the same.
If you joined on 6 April 2026, your update for 6 April to 5 October 2026 is due by 7 November 2026.
Penalties
HMRC will not apply penalty points for late quarterly updates during the 2026 to 2027 tax year. Late tax returns for that year still get points. After that, each missed quarterly deadline gives one penalty point. At 4 points you pay a £200 penalty. (gov.uk)
Your normal tax return still matters
For the 2025 to 2026 tax year, the online Self Assessment return and payment are due by 11:59pm on 31 January 2027. A paper return for that year must reach HMRC by 31 October 2026. (gov.uk: Self Assessment deadlines)
Choosing software
HMRC has a software finder that asks a few questions and gives you a list. All software listed has been through HMRC's recognition process. HMRC does not recommend any product or provider. Free products exist for simple tax affairs, but they may limit how you use them, for example the number of transactions. (gov.uk: find compatible software)
What to do now
If you are in since April 2026: check your 7 November update is on track.
If you may join in April 2027: add up your gross self-employment and property income for 2025 to 2026. If it is over £30,000 and no exemption applies, the April 2027 start is the one to plan for. Pick and test software before then.
If you may join in April 2028: watch your 2026 to 2027 gross income against £20,000, and start keeping digital records early so the switch is not a shock.
Octobooks keeps your books with your own Claude; see octobooks.ai.