Making Tax Digital for Income Tax is the biggest change to Self Assessment since Self Assessment itself. From 6 April 2026 it is law for sole traders and landlords whose qualifying income is over £50,000 — and surveys keep finding that most affected people still don't know what it requires. Here's the whole picture, without the jargon.
Who is caught, and when
- From April 2026: sole traders and landlords with qualifying income over £50,000 (based on your 2024–25 tax return).
- From April 2027: the threshold drops to £30,000.
- From April 2028: it drops again to £20,000.
- Qualifying income means gross self-employment plus property income combined — before expenses.
What actually changes
- Digital records: income and expenses must be kept in MTD-compatible software — a shoebox of receipts and a January spreadsheet no longer count.
- Quarterly updates: cumulative summaries go to HMRC four times a year — by 7 August, 7 November, 7 February and 7 May.
- A final declaration at year end replaces the old return, pulling everything together.
- A sole trader who also has rental property files two updates each quarter — one per income stream.
Penalties (and the grace year)
Late quarterly updates earn penalty points, and points convert to £200 fines once they stack up. HMRC has confirmed a softer first year for those joining in April 2026 — but the final declaration and payment deadlines carry no such mercy, and the quarterly habit is exactly the thing that takes months to build.
What to do now
- Check whether your 2024–25 income puts you in scope — if it's near £50,000, check properly, not by feel.
- Choose MTD-compatible software before your first quarter, not during it.
- Reconstruct clean digital records from 6 April 2026 onwards — the earlier this starts, the cheaper it is.
- Or hand the quarters to us: digital records, quarterly submissions, tax estimates and deadlines, handled. Your Final Annual Declaration and Tax Return is prepared and priced separately.