Making Tax Digital for Income Tax: 2026/27 Guide for Sole Traders and Landlords

Making Tax Digital for Income Tax: 2026/27 update

Making Tax Digital for Income Tax is now in force. If your qualifying income from self-employment and property was over £50,000 in 2024/25, you should have started using MTD for Income Tax from 6 April 2026. The threshold falls to over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028.

Under MTD for Income Tax, affected sole traders and landlords need compatible software, digital records and quarterly updates for each relevant business. The quarterly updates are summaries rather than tax returns. HMRC has confirmed that penalty points will not apply to late quarterly updates for the 2026/27 tax year, although the updates still need to be sent before the tax return can be submitted.

Check the current HMRC MTD eligibility guidance and quarterly update guidance for your circumstances.

InChart can support digital bookkeeping and Self Assessment using Xero or FreeAgent, together with bookkeeping services in Coventry and Warwickshire and Self Assessment support.

What you need to do under MTD for Income Tax

If MTD applies to you, you need to keep the required self-employment and property records digitally, use compatible software, and send quarterly updates to HMRC for each relevant business. Quarterly updates are summaries of income and expenses, not separate tax returns.

Each quarterly update is cumulative. It covers the period from the start of the tax year to the end of the relevant update period, so later updates include the earlier figures.

For a tax year in which you are required to use MTD, your annual tax return must also be submitted using compatible software.

MTD Income Tax thresholds

The current mandatory start dates are: more than £50,000 qualifying income for 2024/25 — 6 April 2026; more than £30,000 for 2025/26 — 6 April 2027; and more than £20,000 for 2026/27 — 6 April 2028. Qualifying income is broadly gross income from self-employment and property before expenses.

Quarterly update deadlines

For standard update periods, the deadlines are 7 August, 7 November, 7 February and 7 May. HMRC will not apply late-submission penalty points for missed quarterly updates during the 2026/27 tax year, but outstanding updates still need to be submitted before the annual tax return can be filed. Late tax return and late-payment rules remain separate.

Exemptions

Some taxpayers are automatically exempt, while others may be able to apply to HMRC for an exemption, for example because they are digitally excluded. See HMRC’s current MTD exemption guidance for the detailed rules.

MTD Income Tax support in Coventry & Warwickshire

InChart Accounting Limited can help sole traders and landlords with digital bookkeeping, compatible software, quarterly updates and the annual tax return. See our MTD Income Tax support in Coventry & Warwickshire for a full explanation of the service and current deadlines.