Do I need to use Making Tax Digital for Income Tax?

The short version

Making Tax Digital (MTD) for Income Tax means keeping your business records digitally and sending HMRC a short summary of your income and expenses every three months, using compatible software. You then finish the year with one final tax return, as you do now. It is being phased in by income: you only need to use it once your qualifying income is over a threshold, and the thresholds drop over three years.

Who it applies to

Sole traders and landlords who file a Self Assessment return and whose qualifying income is over the threshold for their start date (below). If you have both self-employment and rental income, they are added together.

GOV.UK says to check whether you might be exempt. We do not cover exemptions here, so read the official guidance if you think you might be.

Qualifying income, explained

Qualifying income is your gross income: what your business took in from self-employment (your turnover) plus any gross property income, before you take off any expenses. It is not your profit.

For example, if you invoiced customers for a total of £60,000 and had £25,000 of expenses, your profit is £35,000 but your qualifying income is £60,000. Wages from a job and other income that is not self-employment or property do not count.

The thresholds and start dates

HMRC looks at the qualifying income on an earlier tax return to decide when you start:

Read it from the top. If your 2024 to 2025 return showed qualifying income over £50,000, you start on 6 April 2026. If not, check the next row, and so on. The first row you are over decides your start date.

The VAT threshold is a separate thing: you must register for VAT when your taxable turnover goes over £90,000 (and can ask to cancel when it is below £88,000). Being over one threshold does not mean you are over the other.

Quarterly updates and the first deadline

A quarterly update is a summary of your income and expenses for the period. It is not a tax return. For someone starting on 6 April 2026, the four updates for 2026/27 are:

So the first update covers 6 April to 5 July 2026 and is due by 7 August 2026. If you start in a later year, you follow the same pattern from your own start date; check GOV.UK for your exact dates.

After the fourth update you still send one final tax return for the year, using compatible software. For the first year that is due by 31 January 2028, and any tax is due by the same date, as now.

GOV.UK also says that for 2026/27 HMRC will not give penalty points for late quarterly updates, but late tax returns can still get them.

Check yourself in four steps

1. Find the turnover from self-employment on each of your recent tax returns, and add any gross property income for the same year.
2. Compare the 2024 to 2025 figure with £50,000. If it is over, you start on 6 April 2026.
3. If not, compare the 2025 to 2026 figure with £30,000 (start 6 April 2027), then the 2026 to 2027 figure with £20,000 (start 6 April 2028).
4. If none is over, MTD for Income Tax does not apply to you yet. Check again as thresholds and your income change.

Worked example 1

A sole trader's qualifying income was £56,000 on the 2024 to 2025 return (threshold £50,000: over). The first year is over its threshold, so you start on 6 April 2026.

Worked example 2

A sole trader's qualifying income was £41,000 on the 2024 to 2025 return (threshold £50,000: not over); then £33,000 on the 2025 to 2026 return (threshold £30,000: over). The 2024 to 2025 figure is not over, so you move on to the next year, which is over, so you start on 6 April 2027.

About this guide

Tax year: 2026/27 (6 April 2026 to 5 April 2027).

Last checked: 9 October 2026 against GOV.UK.

GOV.UK pages used:

• Use Making Tax Digital for Income Tax: introduction
• Work out your qualifying income for Making Tax Digital
• Making Tax Digital: send quarterly updates
• VAT thresholds

This guide is general information, not tax advice.