Guides · Updated 2026-10-15

Making Tax Digital for Income Tax: dates for sole traders

Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords report to HMRC: digital records, an update every quarter, then a tax return at the end of the year. It started for the first group on 6 April 2026 and widens in 2027 and 2028. Everything below is from GOV.UK, checked 15 October 2026.

Check your own dates with the Making Tax Digital checker.

Who it applies to, and when

You need to use MTD for Income Tax if you're a sole trader or landlord registered for Self Assessment, you have self-employment or property income, and your qualifying income is over the threshold (GOV.UK):

Partnerships don't need to use it yet; HMRC will set out a timeline later.

What counts as qualifying income

Qualifying income is your total self-employment and property income before expenses: your turnover, not your profit. If you have a trade and a rental property, add them together. Employment income, dividends and pensions don't count (GOV.UK).

So a sole trader with £35,000 of sales and £15,000 of expenses has qualifying income of £35,000. If that was in 2025 to 2026, they're in from 6 April 2027, even though their profit is £20,000.

HMRC checks your Self Assessment return each year and writes to you if you're over the threshold. If you don't get a letter, it's still your responsibility to check.

What you have to do

Once you're in, you keep digital records in software that works with MTD, and send quarterly updates. The quarterly update deadlines are 7 August, 7 November, 7 February and 7 May. The tax return and any tax owed are still due by 31 January after the end of the tax year (GOV.UK).

HMRC has a tool to find software that works with MTD for Income Tax. Check whether the invoicing or accounting app you already use is on it; see our bookkeeping tools and best accounting software pages.

To sign up, you must be registered for Self Assessment and have submitted a tax return in the last 2 years. You still submit a normal Self Assessment return for the tax year before you start.

If you're also VAT-registered, Making Tax Digital for VAT is a separate requirement; see should I register for VAT?.

Penalties

MTD brings a new points-based system for late submissions. Each missed quarterly update or tax return deadline earns a point; at 4 points you get a £200 penalty, and another £200 for each further missed deadline. There are no penalties for missing a quarterly update in the 2026 to 2027 tax year, but you still need to send them before you can submit your return. Late payment penalties are also changing (GOV.UK).

Exemptions

You're automatically exempt if your qualifying income is £20,000 or less, or if you don't have a National Insurance number before the start of the tax year. You can apply for an exemption in other cases, for example if you're digitally excluded. If you're exempt, you carry on filing Self Assessment as normal (GOV.UK).

For CIS subcontractors and trades

If you're self-employed, your trade income counts towards qualifying income in the same way as any other sole trader's: it's turnover before expenses. Keeping each invoice in an app from the start makes quarterly updates much easier. If you're working out what you'll owe, see how CIS tax is calculated.

FAQ

When does Making Tax Digital for Income Tax start?

From 6 April 2026 if your qualifying income was over £50,000 in 2024 to 2025; 6 April 2027 if over £30,000 in 2025 to 2026; and 6 April 2028 if over £20,000 in 2026 to 2027.

Is the threshold based on profit or turnover?

Turnover. Qualifying income is self-employment and property income before expenses.

When are the quarterly update deadlines?

7 August, 7 November, 7 February and 7 May.

Will I be fined for a late quarterly update?

Not for the 2026 to 2027 tax year. After that, missed deadlines earn penalty points, with a £200 penalty at 4 points.

Do partnerships need to use it?

Not yet. HMRC says it will set out a timeline for partnerships later.