Key takeaways
- MTD for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000 in 2024/25.
- It extends to qualifying income over £30,000 from April 2027 (based on 2025/26) and over £20,000 from April 2028 (based on 2026/27).
- Qualifying income is gross self-employment and property income before expenses, not profit.
- Quarterly updates are due on 7 August, 7 November, 7 February and 7 May, with the tax return by 31 January.
- There are no penalties for missed quarterly updates in 2026/27, but they must still be sent before the tax return.
Making Tax Digital (MTD) for Income Tax is being phased in over three years. Whether and when you need to join depends on your qualifying income in a tax year two years earlier. This page sets out the dates in one place.
The rollout at a glance
| Start date | Qualifying income over | Measured in tax year | Who it affects |
|---|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 | Sole traders and landlords with the highest gross income |
| 6 April 2027 | £30,000 | 2025/26 | A much larger group of the self-employed and landlords |
| 6 April 2028 | £20,000 | 2026/27 | Most remaining sole traders and landlords above £20,000 |
| To be confirmed | Not yet set | Not yet set | Partnerships |
HMRC reviews each Self Assessment return and writes to people whose qualifying income is over the threshold, confirming they need to start. If you do not get a letter, it is still your responsibility to check and sign up.
What counts as qualifying income
Qualifying income is the total of your gross income from:
- self-employment (your turnover, before expenses)
- UK and overseas property (rents received, before expenses)
It does not include employment income, pensions, dividends, savings interest or partnership income. A landlord with £35,000 of rent and £10,000 of expenses has qualifying income of £35,000, not £25,000. Jointly owned property counts at your share of the income.
Example
Priya is employed on £45,000 and has a buy-to-let flat with gross rent of £18,000 and a side business with turnover of £14,000. Her qualifying income is £32,000. If her 2025/26 figures are similar, she must join MTD from 6 April 2027. Her salary does not count.
Key deadlines once you are in MTD
Quarterly updates
| Standard update period | Deadline |
|---|---|
| 6 April to 5 July | 7 August |
| 6 April to 5 October | 7 November |
| 6 April to 5 January | 7 February |
| 6 April to 5 April | 7 May |
Each update is cumulative, covering the tax year to date, and is sent from your software. You can choose calendar quarters (to 30 June, 30 September, 31 December and 31 March) if your accounts run to 31 March; the deadlines are the same.
The tax return
After the year ends, you finalise your figures and submit your tax return through MTD-compatible software by 31 January following the tax year. Tax is paid on the usual Self Assessment dates, including payments on account on 31 January and 31 July.
Penalty timeline
| Tax year | Quarterly updates | Tax return | Late payment |
|---|---|---|---|
| 2026/27 (first MTD year for the £50,000 group) | No penalty points for missed quarterly updates | Points-based: 1 point per missed deadline, £200 at 4 points | 3% at day 15, a further 3% at day 30, then 10% a year; 30 days’ grace in your first year |
| 2027/28 onwards | 1 point per missed deadline (one point per deadline, however many businesses) | As above | 4% at day 15, a further 4% at day 30, then 10% a year |
Taxpayers who are not in MTD keep the old Self Assessment penalties until 6 April 2027, when the points-based regime is extended to everyone filing Self Assessment.
The year before you join
You must still file a normal Self Assessment return for the tax year before you start. For the April 2027 group, that means filing the 2025/26 return by 31 January 2027, and HMRC will use it to confirm your qualifying income.
Use the year before to:
- choose MTD-compatible software and practise with it
- move your bookkeeping into digital records
- sign up through GOV.UK, or ask your accountant to sign you up
- decide whether to use standard or calendar update periods
Who is exempt or deferred
You may be exempt if you are digitally excluded (for example because of age, disability, location or religious belief), have no National Insurance number, or act under a power of attorney or deputyship. Some groups have been deferred to April 2027, including recipients of trust and estate income, those using averaging adjustments (such as farmers and creative workers), people receiving qualifying care income, and non-resident entertainers and sportspeople. Check the guidance for your situation.
Frequently asked questions
When does MTD for Income Tax start?
6 April 2026 for qualifying income over £50,000, 6 April 2027 for over £30,000 and 6 April 2028 for over £20,000.
Is the MTD threshold based on profit or turnover?
On gross income (turnover and rents) from self-employment and property, before expenses.
Which tax year decides whether I join in April 2027?
Your 2025/26 tax year, reported on the return due by 31 January 2027.
Are there penalties for late quarterly updates in the first year?
Not for 2026/27. Quarterly update penalty points start from 2027/28, but late tax returns and late payments are penalised from the start.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance in October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.