Making Tax Digital for Income Tax: Who's In, From When, and What Actually Changes
Making Tax Digital for Income Tax is the biggest change to Self Assessment since Self Assessment itself. It has been postponed so many times that plenty of sole traders and landlords have stopped believing in it — but the first mandation date is now real, legislated, and months away. Here is who is caught, when, and what day-to-day life looks like inside it.
The timetable: three waves, by gross income
Whether MTD applies to you depends on your qualifying income: your self-employment turnover plus your gross property income, added together, before any expenses. Employment income, pensions, dividends and savings interest don't count at all.
Each wave is judged on the tax return filed two years earlier — so the April 2026 group is decided by the 2024/25 return being filed by this coming January. Below £20,000, no start date has been set.
Gross means gross — the trap in the test
The thresholds bite on turnover, not profit. A landlord collecting £55,000 of rent with £30,000 of mortgage interest and costs has £25,000 of profit — and is in the first wave anyway. A sole trader with £40,000 of sales and a £12,000-a-year rental property clears £50,000 combined and joins in 2026. This is the single most misunderstood part of the rules, and it is why people with modest profits keep discovering they are caught. Two minutes with the checker settles it for your own numbers.
What life inside MTD looks like
Once mandated, you keep your business records digitally and send HMRC an update each quarter through MTD-compatible software, plus a final return. For the first wave, year one runs like this:
| Filing | Covers | Deadline |
|---|---|---|
| Quarterly update 1 | 6 Apr – 5 Jul 2026 | 7 Aug 2026 |
| Quarterly update 2 | 6 Apr – 5 Oct 2026 | 7 Nov 2026 |
| Quarterly update 3 | 6 Apr – 5 Jan 2027 | 7 Feb 2027 |
| Quarterly update 4 | 6 Apr 2026 – 5 Apr 2027 | 7 May 2027 |
| Final tax return | The 2026/27 year, finalised | 31 Jan 2028 |
Two features make this less fearsome than it sounds. The updates are cumulative — each one re-sends the year so far, so a mistake in the summer is simply corrected in the autumn, with no amendment process. And they are summaries of totals, not transaction-by-transaction filings; if your records are in order, an update is close to a button-press. The updates don't even need to be accurate to the penny — the accounting adjustments all happen in the final return, as now.
MTD doesn't change what you owe or when you pay it. It changes how often HMRC hears from you — from once a year to five times.
What it costs, and what you get back
The real cost is the shift itself: software (bridging tools that connect a spreadsheet count, and free tiers exist for simple affairs), a tidier record-keeping habit, and either your time each quarter or your accountant's. The compensation is genuine: quarterly figures mean you see your tax position building through the year, which makes January's bill — and the payments on account that come with it — far less of an ambush. Missed deadlines earn penalty points rather than instant fines, with a £200 charge only once four points accumulate.
How to get ready
Worth doing this year
- Check your date against your gross income — including the rent
- Separate business banking — digital records start with clean feeds
- Pick software early — or ask your accountant what they'll use
- Consider joining voluntarily a year early to rehearse without penalties
Not worth worrying about
- Your PAYE job, dividends or savings — none of it counts
- Paying tax more often — payment dates are unchanged
- Penny-perfect quarters — adjustments happen in the final return
- Partnerships and companies — not in scope, no dates announced
The bottom line
If your gross self-employment and property income clears £50,000, your MTD life starts in April 2026 and your first deadline is 7 August 2026. If it clears £30,000 or £20,000, you have one or two more years — which is exactly the time to get the records habit in place cheaply. The rules reward the prepared and penalise the surprised, and for once the preparation is genuinely simple.
Use the MTD checker →
Common questions
Sources
GOV.UK — Find out if and when you need to use Making Tax Digital for Income Tax, LITRG — When does Making Tax Digital start for me? and ICAEW — TAXguide: MTD income tax. See our full methodology and rates.
This article is general information for the 2026/27 tax year and not personalised financial advice. MTD rules and dates are set by HMRC and can change — verify your own position against GOV.UK before making decisions.