Making Tax Digital for Income Tax, explained

Since 6 April 2026, sole traders and landlords with more than £50,000 of self-employment and property income must keep digital records and send quarterly updates to HMRC. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028.

When it applies to you

StartsIncome overBased on
6 April 2026£50,0002024/25
6 April 2027£30,0002025/26
6 April 2028£20,0002026/27

HMRC looks at the return from two years earlier. If your 2025/26 return shows more than £30,000 of qualifying income, you join in April 2027.

What counts as qualifying income

Your total gross income, before expenses, from self-employment and property added together. A designer with £22,000 of sales and £10,000 of rent has £32,000 of qualifying income. Salary from a job, dividends, pensions and your share of a partnership do not count. For jointly owned property, only your share counts.

What you have to do

  • Keep your business and property records in software that works with Making Tax Digital.
  • Send a quarterly update of income and expenses through that software.
  • Still submit a final tax return by 31 January after the tax year.

Quarterly deadlines

Quarter endsUpdate due
5 July7 August
5 October7 November
5 January7 February
5 April7 May

You can choose calendar quarters instead (ending 30 June, 30 September, 31 December and 31 March). The deadlines stay the same.

Does it change how much tax I pay?

No. The tax rules and the payment dates are the same. Quarterly updates are for reporting, not paying. Your bill is still due on 31 January, with payments on account if they apply. The self-employed tax calculator shows yours, and flags when Making Tax Digital is likely to apply.

Frequently asked questions

I have £45,000 of sales as a sole trader. Do I need Making Tax Digital?

The test uses qualifying income: your gross self-employment and property income (turnover) before expenses, not your profit. Not in 2026/27, as long as your 2024/25 qualifying income was £50,000 or less. If your 2025/26 qualifying income was over £30,000 you will from 6 April 2027. Now is a good time to choose software.

Is the threshold before or after expenses?

Before. It is your gross income, not your profit, unlike Income Tax which is charged on profit.

Are there exemptions?

Yes. If you are digitally excluded, for example because age, disability, health or location means you cannot reasonably use software, you must apply to HMRC by phone or in writing; the exemption is not automatic. A few groups are exempt automatically, such as people without a National Insurance number. Exempt people still file a normal Self Assessment return.

Source: gov.uk Making Tax Digital for Income Tax guidance. Updated 2026-11-04. General information, not tax advice.