Making Tax Digital for Income Tax changes how sole traders and landlords keep records and report to HMRC. Instead of one Self Assessment return a year, you keep digital records and send a short update every quarter, then confirm the final figures after the tax year ends.
Who it applies to
It is being phased in by income. Sole traders and landlords with qualifying income over £50,000 joined first, from April 2026. The threshold drops to £30,000 from April 2027 and to £20,000 from April 2028. Qualifying income means your gross self-employment and property income added together, before expenses, not your profit.
Your checklist
- Work out your qualifying income for the tax year HMRC will use to decide when you join.
- Choose software that HMRC recognises for Making Tax Digital, and check it suits how you work.
- Open a separate bank account for the business if you have not already, so transactions are easy to match.
- Record income and expenses digitally as you go, rather than in one rush at the end of the quarter.
- Put the quarterly deadlines in your calendar: 7 August, 7 November, 7 February and 7 May.
- Plan a short review each quarter so the year-end figures hold no surprises.
What does not change
Your tax bill is still worked out on the whole year, and payments on account still apply. The quarterly updates are summaries of your records, not extra tax returns, and they do not trigger a payment on their own.
Where we can help
We set up the software, connect your bank feed and agree a simple routine with you, so each quarterly update takes minutes. If you are not sure when you need to join, we can check that in a free consultation.
This article is general guidance, not advice for your own circumstances. Rules and thresholds can change, so check the current position before you act.