Making Tax Digital for Income Tax: Key Dates and What to Do Now

The Making Tax Digital for Income Tax (MTD for ITSA) initiative is transforming tax compliance for UK sole traders and landlords. Instead of a single annual return, you’ll keep digital records and submit quarterly updates.


What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) is an HMRC initiative to digitise the UK tax system. It requires eligible businesses and landlords to maintain digital records, send quarterly updates, and file a final annual declaration, all using HMRC-approved software.


Why Is HMRC Moving to Digital Tax?

The aim is to make the tax system more efficient, accurate, and easier to manage, reducing manual errors and encouraging real-time reporting.


Who Must Comply and When?

  • From 6 April 2026, Sole traders and landlords with total gross income over £50,000 must use MTD for income tax.
  • From 6 April 2027: The threshold lowers to £30,000.
  • The Spring Statement 2025 officially announced that MTD for Income Tax will extend to those with qualifying income over £20,000 from April 2028
  • Check your qualifying income using GOV.UK eligibility guidance.


MTD does not apply if your only income is from employment or pensions.


Special Cases and Exemptions

You are exempt if:

  • Your annual qualifying income is below the threshold.
  • You meet HMRC’s exemption criteria for reasons of age, disability, location, or religious beliefs.

See how to apply or check for exemption at GOV.UK exemption info.

Date Event
6 April 2026 MTD mandatory for those with qualifying income above £50,000
6 April 2027 Threshold lowers to £30,000
End of each quarter Quarterly updates due (see schedule below)
31 January, following the tax year Final declaration deadline (replaces Self Assessment for most)

For a detailed timeline, see official MTD dates (MakingTaxDigital.gov.uk).


Quarterly Update Schedule

Standard quarters:

  • 6 April – 5 July (Submit by 7 August)
  • 6 July – 5 October (Submit by 7 November)
  • 6 October – 5 January (Submit by 7 February)
  • 6 January – 5 April (Submit by 7 May)


Or you can choose reporting in calendar quarters. Details on the

official GOV.UK quarterly update guidance.


How to Prepare for MTD for Income Tax

Step 1: Check if you qualify
Add total gross receipts from self-employment and UK property.

Step 2: Register for MTD
Use your Government Gateway account. HMRC will contact eligible taxpayers after reviewing 2024/25 returns.

Step 3: Choose MTD-Compatible Software
You must use a product from an approved list of software.

Step 4: Start keeping digital records
All business and property records need to be maintained digitally, with digital links between systems (no copy-pasting).

Step 5: Understand quarterly reporting
Quarterly updates require cumulative year-to-date income and expenses for each qualifying source.


Special Guidance: Jointly Owned Property and Income Types

  • Joint owners must each report their share; you may record category totals (not each transaction).
  • Expenses are reported with the annual declaration, not each quarterly update.
  • Joint property rules and details.


What Income Sources Are Covered / Not Covered?

Included:

  • Sole trader profits
  • UK property income (including joint properties)
  • Furnished holiday lets
  • Some foreign property (if UK domiciled)

Excluded:

  • PAYE income
  • Most foreign income (unless UK domiciled)
  • Dividends
  • Savings interest


Penalties

A new late submission penalty system will apply:

  • One point per missed quarterly update, £200 fine when the threshold is reached.
  • Late payment penalties: From 6 April 2025, no penalty if paid within 15 days, 3% penalty from day 16-30, and 10% per annum from day 31 onwards


Contact 10CA today and ensure you’re MTD-ready before 2026.


Get Expert Help

If you need personalised guidance, visit GOV. The UK’s main MTD for Income Tax collection or consult a professional.


Notice: This summary was updated July 2025 from official government sources and is for general information only. Always confirm any compliance action with the current government pages above.


Frequently Asked Questions

  • Do landlords have to comply?

    Yes, if they earn more than the qualifying threshold.

  • Can I use spreadsheets?

    Only if spreadsheets are connected via a digital link to MTD-compatible software.

  • Will partnerships join?

    MTD for partnerships will be introduced at a future date to be announced.

  • Will I still file a Self Assessment?

    Self Assessment remains only for income not in scope for MTD (e.g., dividends, overseas income).

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