Making Tax Digital UK for Income Tax — What Self-Employed People Must Know
Making Tax Digital (MTD) for Income Tax changes how self-employed people and landlords report their income to HMRC. Instead of one tax return a year, you keep digital records and send quarterly updates. This making tax digital UK guide explains who must join, when, and what to do now.
What is Making Tax Digital for Income Tax?
Making tax digital UK is HMRC’s system for reporting self-employment and property income digitally. You keep your income and expense records in MTD-compatible software, send HMRC a summary every quarter, and then file a final declaration at the end of the tax year.
It does not change how much tax you pay. It changes how and when you report it.
Who must join — and when?
MTD for Income Tax is being introduced in stages, based on your qualifying income — your gross income from self-employment and property, before expenses are taken off.
- From 6 April 2026: qualifying income over £50,000
- From 6 April 2027: qualifying income over £30,000
- From 6 April 2028: qualifying income over £20,000
Wages, dividends, pensions and partnership income do not count towards qualifying income. Only self-employment and property income counts.
HMRC decides which year you join from your Self Assessment return. Your 2025/26 return, due 31 January 2027, decides whether you join at the £30,000 threshold from April 2027.
What are quarterly updates?
Instead of waiting until January to tell HMRC everything, you send a summary of your income and expenses every three months:
- 6 April to 5 July
- 6 July to 5 October
- 6 October to 5 January
- 6 January to 5 April
Each update is due one month after the quarter ends. After the fourth quarter, you make a final declaration — this replaces the old Self Assessment return for that income, and is due by 31 January after the tax year ends.
What software do you need?
You cannot file MTD quarterly updates through HMRC’s website alone. You need MTD-compatible software — accounting software or a bridging tool that can send the updates to HMRC.
Check that your software is on HMRC’s list of MTD-compatible software before you rely on it. Spreadsheets alone are not enough unless they are linked to bridging software.
What records do you need to keep?
Keep digital records of:
- Income: invoices, sales, rent received
- Expenses: business costs, with receipts
- Dates and amounts for every transaction
Keep records for at least five years after the 31 January deadline, in most cases — check GOV.UK for your situation.
What if your income is under the threshold?
If your qualifying income is under the threshold for that year, you do not have to join making tax digital UK yet. You can still join voluntarily if you want to, but you do not have to.
Watch the thresholds: if your income grows, you may cross into MTD in a later year. Check your income each year, not just once.
What to do now
- Work out your qualifying income for 2025/26 — self-employment + property, before expenses
- If it is over £30,000, plan to join from 6 April 2027
- Choose MTD-compatible software and start keeping digital records now
- If it is over £50,000, you should already be in making tax digital UK from 6 April 2026 — check your position
- Talk to an accountant if you are unsure whether you are in scope
Frequently asked questions
Does MTD change how much tax I pay?
No. It changes how you report income, not the tax rates or allowances.
Do I still file a Self Assessment return?
For income in MTD, the final declaration replaces that part of the return. Other income outside MTD is still reported in the normal way.
Can I use a spreadsheet?
Only if it is linked to MTD-compatible bridging software. A spreadsheet on its own cannot send quarterly updates to HMRC.
What happens if I miss a quarterly update?
HMRC has a points-based penalty system for late MTD submissions. File on time, even if your figures are estimates you later correct.
Is MTD for VAT the same thing?
No. MTD for VAT has been in place for VAT-registered businesses for longer. Making tax digital UK for Income Tax is a separate system, for self-employment and property income.
This article gives general information about UK tax, not personal financial or tax advice. Tax rules can change, and your situation may be different. Check GOV.UK or speak to a qualified accountant before you act.
