Last checked 19 October 2026
Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords keep records and report to HMRC. If you’re one of the people starting on 6 April 2027, this page is the place to begin. Every fact here is checked against GOV.UK, and each of our guides links to the exact pages we used.
This is general information, not tax advice. Check GOV.UK or speak to an accountant about your situation. Why we say this.
What MTD for Income Tax is
GOV.UK describes it as “a new way for sole traders and landlords to do Self Assessment”. Some things stay the same: you still send one tax return a year and pay your tax bill by 31 January after the tax year ends. What’s new, according to GOV.UK’s guide for first-time users:
- you use compatible software (HMRC doesn’t provide it)
- you create digital records of your self-employment and property income and expenses
- you send quarterly updates every 3 months, which are summaries, not tax returns
- you add any other income and submit your tax return through your software
- there are new penalties for late submissions and late payment
Who’s in, and when
GOV.UK says you need to use MTD for Income Tax if you’re a sole trader or landlord registered for Self Assessment, you get income from self-employment or property (or both), and your qualifying income is over the threshold.
| Qualifying income on your tax return for | Over | You’ll need to use MTD from |
|---|---|---|
| 2024 to 2025 | £50,000 | 6 April 2026 |
| 2025 to 2026 | £30,000 | 6 April 2027 |
| 2026 to 2027 | £20,000 | 6 April 2028 |
Qualifying income is your turnover from self-employment and property before expenses, not your profit. HMRC estimates around 1,077,000 more sole traders and landlords will need to use MTD from 6 April 2027.
GOV.UK says HMRC writes to people over the threshold after reviewing their return, but if you don’t get a letter it’s still your responsibility to check. HMRC’s online checker tells you if and when you need to start.
Key dates for the April 2027 group
- 31 January 2027: online deadline for your 2025 to 2026 tax return, the one HMRC uses to check the £30,000 threshold
- 6 April 2027: MTD starts and digital records begin (1 April 2027 if you use calendar update periods)
- 7 August 2027, 7 November 2027, 7 February 2028 and 7 May 2028: quarterly update deadlines for 2027 to 2028
- 31 January 2028: your 2026 to 2027 tax return, sent the usual way
- 31 January 2029: your first tax return through MTD software, for 2027 to 2028
These dates apply GOV.UK’s published update periods and deadlines to 2027 to 2028. Add the quarterly deadlines and MTD start dates to your calendar for free, with no sign-up: MTD key dates calendar (.ics)
Start here: our MTD guides
- The £30,000 MTD threshold explained: what counts as qualifying income, what doesn’t, and which tax return HMRC checks.
- MTD quarterly deadlines 2027 to 2028: every date for your first MTD year, standard and calendar update periods.
- Can I keep using spreadsheets for MTD?: how bridging software works and the digital link rules.
- MTD penalties from April 2027: penalty points, the £200 penalty, late payment penalties and how points are removed.
- MTD exemptions: who can be exempt, which exemptions are automatic and how the application works.
- How to sign up for MTD for Income Tax: what you need, the identity check, authorising your software and whether HMRC will sign you up.
- MTD quarterly updates explained: what’s in an update, why each covers the tax year so far, and your tax estimate.
- Your MTD tax return: adjustments, adding other income, checking HMRC’s figures and submitting.
- MTD and changes: starting a new business, stopping trading, opting out and switching software.
The steps, in GOV.UK’s order
GOV.UK’s step-by-step guide sets out five steps:
- Work out your qualifying income.
- Find out if and when you need to use MTD.
- Get compatible software.
- Sign up for MTD for Income Tax.
- Use MTD: create digital records, send quarterly updates and submit your tax return.
GOV.UK says you should choose your software before you sign up. You can also sign up voluntarily before you need to, for the current tax year or the next one. Volunteers have different penalty rules, so read those first.
Where to check on GOV.UK
- Find out if and when you need to use Making Tax Digital for Income Tax
- Work out your qualifying income
- Choose the right software and HMRC’s software finder
- Sign up for Making Tax Digital for Income Tax
- Use Making Tax Digital for Income Tax, HMRC’s full guide
- Penalties for Making Tax Digital for Income Tax
- Find out if you can get an exemption
- Help and support, including HMRC’s digital assistant and contact details
The Smart Sole Trader is an independent publication. We’re not HMRC or part of government, and HMRC does not recommend any software product or provider.
Frequently asked questions
Is MTD four tax returns a year?
No. GOV.UK says quarterly updates are summaries, not tax returns. You still send one tax return a year.
Do I have to pay tax every quarter?
GOV.UK says MTD for Income Tax won’t change the way you pay tax or the dates payments are due.
Does HMRC provide free software?
HMRC doesn’t provide software. GOV.UK says free products are available for people with simple tax affairs, though they may have limits.
My income is under £30,000. Does MTD affect me?
GOV.UK says the threshold falls to £20,000 from 6 April 2028, based on your 2026 to 2027 return. Check HMRC’s online tool or speak to an accountant about when it applies to you.