Making Tax Digital for Income Tax (MTD) changes how you tell HMRC about your income, not how much tax you pay. Instead of one return a year, you send a short summary every three months from software, and finish the year with a final declaration.
Who is in, and when
It depends on your qualifying income: self-employed turnover plus property income, before expenses. Not profit, and not wages.
| Start date | Qualifying income | Measured on your tax return for |
|---|---|---|
| 6 April 2026 | Over £50,000 | 2024 to 2025 |
| 6 April 2027 | Over £30,000 | 2025 to 2026 |
| 6 April 2028 | Over £20,000 | 2026 to 2027 |
Each date is tied to a tax return, so you can tell where you stand a year ahead. If your 2025 to 2026 return shows qualifying income over £30,000, you start on 6 April 2027. The checker will do the sum for you.
What you actually do
Keep records digitally. That means in software, either an all-in-one app or a spreadsheet joined to HMRC by bridging software. A shoebox is not a record. A photo of the receipt on the day you get it is.
Send an update every quarter. It's totals, not receipts: income and expenses by category for the three months. The standard quarters end on 5 July, 5 October, 5 January and 5 April, and the updates are due by 7 August, 7 November, 7 February and 7 May. You can choose calendar quarters instead (ending 30 June, 30 September, 31 December and 31 March), with the same due dates.
Finish the year. By 31 January after the tax year ends you send a final declaration through your software. It adds in everything the quarters don't cover, such as other income and reliefs, and takes the place of the old tax return. Your payment dates, 31 January and 31 July, do not change.
What the quarterly update is not
It is not a tax bill. HMRC gives you an estimate after each update, which is useful for knowing what to put aside, but you pay on the usual dates. It's also not a deadline for perfect figures. Corrections are made in the next update or at the final declaration.
Penalties
Late updates earn penalty points. Reach the points limit and a fixed financial penalty follows. Late payment is dealt with separately, with interest. HMRC has said it will go gently on late quarterly updates in the first year. Our advice is not to rely on that, and to send them on time. This is general guidance and HMRC can change it, so check gov.uk for the current position.
Who is exempt
Some people don't have to join, for example those whose qualifying income is £20,000 or less, people without a National Insurance number, and people who can't use digital tools because of age, health, disability, religious belief or no internet access. “I've always used paper” isn't accepted. The full list is on our checker page.
Software
Pick software that is on HMRC's list of MTD-compatible products. For most sole traders an all-in-one app that links to the bank is the easy option: the bank feed fills in most of it, and the app asks you what the odd payments were. Our sole trader and CIS packages include a licence and we set it up with you.
What to do now
- Find out your date. If it's 6 April 2027, you have until then to be ready, and it is worth starting the new habits before the tax year turns.
- Open a separate business bank account if you don't have one. It makes the bank feed almost self-explanatory.
- Photograph every receipt on the day. Car park, not January.
- Choose software, or ask us to.
- Put the quarterly dates in your phone: 7 August, 7 November, 7 February, 7 May.
General guidance, not advice on your own position. Rules checked against gov.uk on 18 September 2026 and liable to change.
We send the updates for you.
Our sole trader package includes all four quarterly updates and the final declaration, from £60 a month + VAT.