Making Tax Digital (MTD) for Income Tax starts on 6 April 2026. It changes how sole traders and landlords keep records and report to HMRC.
The first group to join will find out from the tax return they file for this tax year, 2024/25. So if you are a sole trader or landlord, now is the time to check if it applies to you.
Who it applies to
MTD for Income Tax applies to individuals who are:
self-employed (sole traders), or
landlords who rent out property, or
both.
It does not apply to limited companies. Partnerships are not included yet. The government has said they will join at a later date.
When it starts for you
It depends on your qualifying income. This is your total turnover from self-employment plus your property income, before any expenses are taken off.
Over £50,000 on your 2024/25 tax return: you start MTD from 6 April 2026
Over £30,000 on your 2025/26 tax return: you start MTD from 6 April 2027
£30,000 or less: not yet decided
Example. Sarah is a self-employed hairdresser with £38,000 of takings. She also rents out a flat for £14,400 a year. Her qualifying income is £52,400. That is over £50,000, so she starts MTD in April 2026, even though her profit is much lower.
Employment income and pension income do not count towards the limit.
What you will have to do
Keep digital records of your income and expenses, using software that works with MTD.
Send a quarterly update to HMRC from that software, four times a year. The deadlines are 7 August, 7 November, 7 February and 7 May.
Finish the year with a tax return by 31 January after the tax year ends, as now. This is where you add other income and claim reliefs.
You still pay your tax on the same dates as now. The quarterly updates do not change when you pay.
If you can't use a computer or the internet, for example because of age, a health condition or disability, or where you live, you can ask HMRC for an exemption. HMRC decides each case on its own facts.
What to do now
Add up your qualifying income for 2024/25. Include all self-employed turnover and all rent before expenses.
Check how you keep records. Paper records will need to move to MTD-compatible software. Spreadsheets can still be used if they are linked to HMRC through bridging software.
Choose your software early. That gives you time to get used to it before it becomes compulsory.
Talk to us. We can tell you if and when MTD applies to you and help you set up.
Summary
From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must use MTD for Income Tax. From April 2027 the limit falls to £30,000. Your 2024/25 tax return decides if you are in the first group.
If you would like help getting ready, book a call or contact us.