Explaining Making Tax Digital (MTD) for Income Tax
What is Making Tax Digital?
Making Tax Digital for Income Tax is a new way for sole traders and landlords to report their income and expenses to HMRC.
From 6 April 2026, sole traders must use it if their self-employment turnover is above £50,000.
What these changes mean for me
- Reduce the chance of making errors in your returns, which can be costly to correct further down the line
- Ensures you have up-to-date, accurate information on hand
- Forecast your predicted tax bill, helping to make sure you pay the right amount of tax
Who's affected
- From 6 April 2026: Sole traders and landlords with turnover over £50,000
- From 6 April 2027: Sole traders and landlords with turnover over £30,000
- From 6 April 2028: Sole traders and landlords with turnover over £20,000
What's changing
How you keep records is changing. You'll need to use recognised software to record your self-employment income and expenses, sending quarterly updates to HMRC. Please be aware, these quarterly updates aren't tax returns. Instead, these are simple summaries of how your business is doing, pulled from your records.
To be clear, you won't pay four tax bills a year. The deadline for paying your tax will still be 31 January, but the process will be simpler thanks to your quarterly updates.
When is Making Tax Digital for Income Tax being introduced?
6 April 2026: If you are self-employed and have an annual business turnover of more than £50,000, then you will need to follow the requirements for Making Tax Digital for Income Tax by 6 April 2026.
6 April 2027: If you are self-employed and have an annual business turnover of more than £30,000, then you will need to follow the requirements for Making Tax Digital for Income Tax by April 2027.
6 April 2028: If you are self-employed and have an annual business turnover of more than £20,000, then you will need to follow the requirements for Making Tax Digital for Income Tax by April 2028.
Checklist to get ready for MTD
Are you affected? Work out your qualifying income from self-employment to see when you need to start using MTD.
Find out your start date (based on your income):
- £50,000 for the 2024 to 2025 tax year – you will need to use it from 6 April 2026
- £30,000 for the 2025 to 2026 tax year – you will need to use it from 6 April 2027
- £20,000 for the 2026 to 2027 tax year – you will need to use it from 6 April 2028
Find software that works for you – this must be compatible software that works with Making Tax Digital.
Update your relevant contacts. If you have an accountant or tax agent, give them a heads up to get prepared and ensure that they can access compatible software.
Sign up to Making Tax Digital – Why wait? Get a head start and sign up for Making Tax Digital today.
Start keeping digital records and submit quarterly updates to HMRC.
For further help and guidance on how to get started, visit the Making Tax Digital Campaign page.
This content was produced in partnership with HMRC.
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