Making Tax Digital for Income Tax: the complete guide for sole traders and landlords
Everything you need to know about MTD for Income Tax in one place, from what it is and whether it applies to you, to software, deadlines, exemptions, and cost.
What is MTD for Income Tax?
Making Tax Digital for Income Tax is a change to how sole traders and landlords report income to HMRC. You still submit one tax return a year, and you still pay by 31 January. What changes is that you keep digital records, send HMRC a summary of your figures every quarter, and submit your tax return through MTD-compatible software rather than HMRC's online portal.
It is not a new tax. What you owe does not change. Payment dates are unchanged. What changes is how often you report, and that you must use compatible software to do it.
Read the full explanation of what MTD for Income Tax is and how it works.
Does it apply to you?
MTD for Income Tax is being phased in over three years based on your total qualifying income from self-employment and property. The thresholds are:
| From | Qualifying income over |
|---|---|
| 6 April 2026 | £50,000 |
| 6 April 2027 | £30,000 |
| 6 April 2028 | £20,000 |
The threshold is based on gross income, not profit, and it covers your combined total across all self-employment and property sources. HMRC uses the relevant Self Assessment return to check whether you are in scope. See the thresholds page for which return year applies to each start date.
Check the thresholds in detail and find out exactly when MTD applies to you.
Everything in this guide
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1
What is Making Tax Digital for Income Tax?What MTD is, what is changing, and what the four mechanics are.
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2
Do I need to do MTD? Thresholds and who is affectedThe three phases, dates, and how HMRC decides whether you are in scope.
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3
How qualifying income is calculatedWhat counts toward the threshold, what does not, and worked examples.
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4
What quarterly updates actually involveWhat you submit, when, and why you do not pay tax four times a year.
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10
Your MTD tax returnHow the MTD tax return works and what the year-end submission involves.
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11
Your first year of MTDHow the transition year works and what runs alongside your last Self Assessment return.
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14
MTD deadlines and key datesQuarterly deadlines, the year-end deadline, and when payment is due.
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7
MTD for landlords, including jointly owned propertyHow MTD works for rental income, joint ownership, and letting agents.
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8
MTD exemptions and how to applyWho is automatically exempt, who can apply, and what HMRC will not accept as a reason.
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9
What happens if your income drops below the thresholdThe three-year rule and why there is no simple opt-out once you are in.
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12
MTD with multiple income sourcesHow many updates you file if you are self-employed and a landlord, or have two businesses.
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5
Software for MTDWhat MTD-compatible software needs to do and how to find something that fits.
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6
Bridging software for spreadsheet usersWhether you can still use a spreadsheet, what bridging software does, and when it suits you.
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15
MTD software comparedA feature and price comparison of recognised options, organised by use case.
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16
Our recommended MTD softwareWhat we actually recommend, by situation, rather than a neutral list.
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13
MTD myths and what is actually trueCommon errors circulating online, corrected in plain English.
Common questions
Yes. MTD for Income Tax became mandatory on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. It has been delayed several times over the years, but this date held and the first group of people are now required to comply. Lower income groups follow in April 2027 and April 2028.
No. MTD can be managed yourself using compatible software. An accountant can run the whole process for you, including the digital records, quarterly updates, and the year-end tax return, but it is not a legal requirement to use one. Having an accountant also does not make you exempt from MTD.
Start by checking whether MTD applies to you and when, using the threshold summary above or the full thresholds page. If you are in scope, the next step is choosing compatible software. The software overview and our recommendations are the best place to start on that.
This page is general guidance, not advice for your own circumstances. It was correct as at the date shown at the top, and tax rules and rates change over time. Please take advice on your own position before acting on anything here.
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