Making Tax Digital for Income Tax: dates, thresholds and deadlines for sole traders

Sole traders and landlords with qualifying income over £50,000 must use Making Tax Digital (MTD) for Income Tax from 6 April 2026. As well as the annual tax return, you keep digital records, send four short updates a year, then file the tax return. This page sets out what HMRC says about who must use it, when, and what happens if you are late. Software comes after that: see the price table and the guide to bridging software for Excel.

General information only, not tax advice. Check GOV.UK or ask a qualified adviser about your situation.

The short version

It already applies if your qualifying income (based on your previous year's tax return) was over £50,000, from 6 April 2026. The limit drops to £30,000 from 6 April 2027 and £20,000 from 6 April 2028.
You keep digital records, send a quarterly update through software, and still submit a tax return by 31 January.
For the 2026 to 2027 tax year, HMRC says there are no penalty points for late quarterly updates. Late tax returns and late payments are still penalised.

Who has to use MTD for Income Tax, and from when?

Income thresholds for MTD for Income Tax (source: GOV.UK)
Start date	Qualifying income over
6 April 2026	£50,000
6 April 2027	£30,000
6 April 2028	£20,000 (measured on the 2026 to 2027 tax year)

"Qualifying income" is your total income from self-employment and property. HMRC's sign-up guidance says this is the amount before expenses (turnover), and is based on the tax return you submitted the previous year.

If the income of your business is below the limit that applies to you, you do not have to use it yet. You can join voluntarily before you need to; HMRC has separate penalty rules for volunteers.

What do you have to do under MTD?

Keep digital records of your self-employment and property income and expenses; HMRC says you only need digital records for those two sources. A spreadsheet can be part of this when it is linked to bridging software.
Send quarterly updates through software that works with MTD for Income Tax. HMRC describes an update as a short summary of income and expenses, not a tax return. The deadlines are 7 August, 7 November, 7 February and 7 May.
Submit your tax return and pay any tax due. The deadline stays at 31 January after the end of the tax year, and quarterly updates do not replace it.

How do you sign up?

To sign up you must be registered for Self Assessment and have submitted a tax return in the last two years. If you needed to use MTD from 6 April 2026 and have not signed up, HMRC says that from September 2026 it will sign people up using the information it already holds, and that information can be out of date. Agents can sign up clients too. Use HMRC's own sign-up guidance.

What are the penalties?

Late quarterly updates: no penalty points for the 2026 to 2027 tax year. For later years each missed deadline earns one point; at four points the penalty is £200, and another £200 for each further missed deadline.
Late tax return: HMRC says: "Penalties do still apply for late Self Assessment returns and late payments." Under the points system, a missed tax return deadline earns a penalty point.
Late payment, 2026 to 2027: up to 15 days late, there is no penalty. At 16 to 30 days it is 3% of the tax owed at day 15, or no penalty if it is your first year. From day 31 it is 3% at day 15 and 3% at day 30, plus 10% a year on the outstanding amount, charged daily. HMRC gives higher rates for 2027 to 2028 (4%). Interest also runs from the first day.

Read the full HMRC penalties guidance before relying on this summary.

Can you be exempt?

HMRC says some people can be exempt, for example those who are digitally excluded. Check HMRC's exemption guidance.

What does this mean for choosing software?

The software must be one HMRC recognises for MTD for Income Tax. HMRC does not recommend any product. It points people to a software finder tool and says free products exist for simple tax affairs, with limits. Our comparison rules explain how we handle prices and sources.

Sources

Last checked: 1 October 2026. Rules and dates can change; GOV.UK is the authority.