July 20, 2026 · 2 min read

MTD for Income Tax: what you need to do now

Krishna Prasad Dahal, Chartered Accountant

Written and reviewed by FCCA, ACA (ICAEW), FCA (ICAI India)ICAEW Council Member · Updated

Last updated 24 September 2026. General guidance, not personalised advice.

MTD for Income Tax is now live

Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords whose qualifying income — gross self-employment plus property income — was over £50,000 on their 2024 to 2025 tax return. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Salary, pensions and dividends don’t count towards it. See our MTD thresholds guide for how the lookback years work.

What MTD for Income Tax requires

  • Keep digital records of your business and property income and expenses. Spreadsheets are still allowed if you send updates through MTD-compatible bridging software.
  • Use MTD-compatible software for each income source.
  • Send quarterly updates to HMRC from that software.
  • File your tax return by 31 January after the end of the tax year.

Quarterly update deadlines for 2026 to 2027

Each update covers the tax year to date. For the standard quarters, the deadlines are:

  • 6 April to 5 July — due 7 August 2026
  • 6 April to 5 October — due 7 November 2026
  • 6 April to 5 January — due 7 February 2027
  • 6 April to 5 April — due 7 May 2027

If your accounting period runs from 1 April to 31 March, you can choose calendar update periods in your software instead.

For what goes into each update, see how MTD quarterly updates work.

Penalties

HMRC will not apply penalty points for late quarterly updates during the 2026 to 2027 tax year. You still have to send them — HMRC won’t accept your tax return until all your quarterly updates are in. Late filing of the tax return itself, and late payment of tax, can still lead to penalties.

What to do if you have not started

  1. Choose MTD-compatible software, or bridging software if you keep spreadsheets.
  2. Separate business and personal bank accounts so your digital records stay clean.
  3. Bring your records for the current tax year up to date.
  4. Ask an accountant to set up your next quarterly update before its deadline.

Sources

If you would like us to handle MTD end-to-end, see our Self Assessment and MTD service or request a fixed-fee quote.