From April 6 2026, sole traders and landlords earning more than £50,000 from self-employment and property must comply with Making Tax Digital (MTD) for Income Tax. They will need to use approved software to keep digital records and send quarterly updates of income and expenses to HMRC. These updates are not additional tax returns.
HMRC offers free support, including online guidance, webinars and videos. Those unable to use digital tools can apply for an exemption. Free software options are available to generate summaries for HMRC. At the end of the tax year, a tax return must still be filed by January 31, but quarterly updates will have already recorded the information.
Exchequer Secretary Dan Tomlinson said: “Making Tax Digital for Income Tax is the biggest modernisation of the tax system for a generation.” He noted that around £6 billion is lost annually due to incorrect tax payments by Self Assessment business customers, and that digital records reduce errors and help customers manage finances.
Thousands have already joined a voluntary testing programme, with over 12,000 quarterly updates submitted. Those joining in April 2026 will file their 2025-26 tax return as usual by January 31 2027. The first MTD return, for 2026-27, is due by January 31 2028. To ease the transition, no penalty points will be issued for late quarterly updates in the first 12 months. After that, points accumulate, with a £200 fine after four points.
HMRC urges those in scope to read guidance, choose software and sign up on GOV.UK. Tax agents should be consulted if used.
