Making Tax Digital for Income Tax
What actually changed, in plain words
MTD for Income Tax went live in April 2026. Most pages about it just restate the rules, so here's the practical version, including the bits people keep getting wrong.
Does it apply to you?
MTD applies to sole traders and landlords whose qualifying income is over the threshold. Qualifying income means turnover before expenses, not profit. This one detail catches more people out than everything else combined.
| From | Applies if qualifying income is over |
|---|---|
| April 2026 | £50,000 |
| April 2027 | £30,000 |
| April 2028 | £20,000 |
Self-employment and property income get added together for the test. If you're under the line, nothing changes for you yet, and we'll happily tell you that for free.
Thirty-second check: does MTD apply to you, and when?
Two questions. Nothing is stored or sent anywhere, it runs in your browser.
The bit people miss
Turnover of £55,000 with £20,000 of costs means a profit of £35,000, which sounds safely under the threshold. It isn't. Qualifying income is the £55,000, so MTD applies.
What changes, and what doesn't
What changes
- Records must be kept digitally. Paper and manual spreadsheets no longer satisfy the rules on their own
- You send HMRC a summary of income and expenses every quarter
- The annual tax return is replaced by a final declaration
- You need MTD-compatible software connected to HMRC
What doesn't change
- You don't pay tax four times a year. Payment dates haven't moved
- Quarterly updates are not tax calculations and are not final
- The amount of tax you owe is not affected by MTD itself
- Payments on account still fall on 31 January and 31 July
The 2026/27 deadlines
| Quarter | Period covered | Deadline |
|---|---|---|
| Quarter 1 | 6 April to 5 July 2026 | 7 August 2026 |
| Quarter 2 | 6 July to 5 October 2026 | 7 November 2026 |
| Quarter 3 | 6 October 2026 to 5 January 2027 | 7 February 2027 |
| Quarter 4 | 6 January to 5 April 2027 | 7 May 2027 |
| Final declaration | Full 2026/27 tax year | 31 January 2028 |
The first year is a grace period
In HMRC's own words: "There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year."
From 2027/28 each missed update earns a penalty point, and the fourth point brings a £200 penalty. After that, every further miss is another £200.
Two things sit outside the grace period. Late payment penalties and interest carry on as normal, and your 2025/26 tax return is still due by 31 January 2027.
Source: HMRC, Penalties for Making Tax Digital for Income Tax. Correct as at August 2026.
How we handle it
You shouldn't have to learn any software. That's what you're paying us for.
We set it up
Software, bank feed, HMRC authorisation. Usually sorted inside a week, and you don't install anything.
We keep it current
We review and categorise the transactions every month, so when a deadline arrives the figures already exist. No quarterly scramble.
We file, you approve
We prepare each update, you glance at it and approve, we submit it. Same routine for the final declaration at year end.
Still not sure where you stand?
Fifteen minutes on the phone and you'll know whether MTD applies to you and what, if anything, needs doing.