Making Tax Digital for Income Tax (MTD for ITSA) is no longer something to prepare for — it went live on 6 April 2026. If your income from self-employment and property was over £50,000 in 2024/25, you should already be keeping digital records and sending quarterly updates. If it was over £30,000 in 2025/26, your turn comes in April 2027. Here is what applies now and what to do next.
Who Is In Scope, and When?
MTD for Income Tax is being phased in according to your qualifying income in an earlier tax year:
| Must use MTD from | Qualifying income over | Based on tax year |
|---|---|---|
| 6 April 2026 (now live) | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
"Qualifying income" is your gross income from self-employment and property added together — before expenses. A landlord with £25,000 of rent and a sole trader turnover of £10,000 has qualifying income of £35,000, for example. Employment income and dividends do not count towards the threshold, and people whose only income is a PAYE salary are not affected. Some people are exempt, for instance if they are digitally excluded, but they must still file a normal Self Assessment return.
What You Have to Do Under MTD
Keep digital records
Income and expenses for each business and property income source must be recorded in HMRC-recognised software. Spreadsheets can still be used, but only with bridging software that submits to HMRC.
Send quarterly updates
For 2026/27 the updates are due by 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027. The first deadline has passed; the next is 7 November 2026. Updates are cumulative, so later ones can correct earlier figures.
Submit a final tax return
After the year ends you finalise your figures, add any other income, and submit through your software. The first one, for 2026/27, is due by 31 January 2028 — the same date as the balancing payment.
Remember that your 2025/26 Self Assessment return is still due under the old system by 31 January 2027. In your first MTD year you effectively run both: the old return for last year, and quarterly updates for this year.
Penalties: A Soft Landing for Year One
Following the November 2025 Budget, HMRC confirmed that late quarterly updates for 2026/27 will not attract penalty points. That does not apply to the final return, and for anyone who joined in April 2026 the points-based regime applies in full from 2027/28 (the first deadline is 7 August 2027): each missed deadline earns a point, and reaching four points triggers a £200 penalty. The October 2026 Budget extended the same soft landing to people joining from April 2027: late quarterly updates for 2027/28 will not attract points, though the final return still does. Late payment penalties apply as normal. Treat this year as the time to get a reliable routine in place, not a reason to skip updates.
What to Do Now
- Already in scope (over £50,000)? Check you are signed up and that your 7 August update went in. If it did not, submit it now — the next update is due 7 November 2026.
- Between £30,000 and £50,000? Check your 2025/26 figures as you prepare that return. If qualifying income was over £30,000, you will need MTD from 6 April 2027. Use the next few months to choose software and start recording digitally.
- Between £20,000 and £30,000? Your 2026/27 income will decide whether you join in April 2028. Moving your bookkeeping into software now will make that switch painless.
- Landlords with jointly owned property — make sure you understand how your share of rent counts towards the threshold. Our landlord accountancy service can help.
- Authorise your accountant — an agent can submit quarterly updates and the final return for you, but needs to be set up with the right access.
Choosing Software
HMRC publishes a list of software that works with MTD for Income Tax on GOV.UK. Mainstream products such as Xero, QuickBooks and Sage all offer MTD-compatible options. The best choice depends on how many income sources you have, whether you want to keep using spreadsheets, and whether your accountant will be doing the submissions. Good digital bookkeeping is the foundation — if records are kept up to date, the quarterly updates themselves take very little time.
Want MTD handled for you?
We set up software, keep your records and file your quarterly updates and final return. Book a free call or see our tax preparation services.