Guide section 01
Who needed to start in April 2026?
HMRC says sole traders and landlords with qualifying income above £50,000 on their 2024–25 return generally needed to use Making Tax Digital for Income Tax from April 2026. Qualifying income is gross turnover from self-employment and property before expenses, rather than taxable profit. The requirement also depends on registration and filing history, so check the current HMRC criteria against your own records.
Guide section 02
What changes in the daily records?
Affected taxpayers must use compatible software to keep digital records of relevant income and expenses. An organised routine matters more than a one-off software purchase: invoices, rents, receipts and bank activity need to be recorded consistently so later updates can be reviewed. If your records live across notebooks and spreadsheets, plan how information will move into a compliant workflow.
Guide section 03
How do quarterly updates fit in?
MTD introduces quarterly updates of income and expenses through compatible software. These are part of an ongoing reporting cycle, but they do not replace the need to complete your annual tax obligations. Set internal dates ahead of each HMRC deadline to reconcile missing transactions and correct categorisation while the details are still fresh.
Guide section 04
What happens at the end of the tax year?
After quarterly updates, you still need to bring together the wider information required for the tax year, such as other taxable income and reliefs, and complete the annual process. Treat the updates as building blocks for a better record trail, not as a final calculation of everything you owe. Check the current HMRC instructions for the exact steps that apply.
Guide section 05
Who comes into scope later?
Current HMRC guidance stages the qualifying income threshold at above £30,000 from April 2027 and above £20,000 from April 2028. These dates make early record keeping useful even if you are not yet in scope. Review the turnover shown on the relevant earlier return rather than estimating from profit or a single good month.
Guide section 06
What should you do now?
Start with three checks: confirm qualifying income and your applicable start date, assess whether your software and records can support digital updates, and identify gaps in the current year’s transactions. Landlords with several properties should keep property records clear; sole traders should make business income and personal transfers easy to distinguish. Ask for tailored advice before changing a filing process.