Compliance
How Making Tax Digital is Reshaping Compliance for UK Landlords and Self-Employed from April 2026
From April 2026, sole traders and landlords earning over £50,000 face radical changes in tax reporting under HMRC’s roll-out of Making Tax Digital for Income Tax—this article guides you through what to expect.
By NomadicTax Research Team • 5-8 min read • March 15, 2026
## What Is Changing from April 6, 2026
- **Who is affected**: Any sole trader or landlord with combined qualifying income (from self-employment and property) of **£50,000 or more** in the 2024-25 tax year must start using Making Tax Digital for Income Tax (MTD ITSA) from 6 April 2026.([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
- **What you’ll need to do**:
* Keep **digital records** of all income and expenses for self-employment and property.([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-spring-2025-simplification-administration-and-reform/tax-update-spring-2025-simplification-administration-and-reform-summary?utm_source=openai))
* Use **HMRC-approved software**. Spreadsheets alone won’t be sufficient unless used via approved bridging software.([gov.uk](https://www.gov.uk/government/publications/making-tax-digital-for-business/making-tax-digital-for-business?utm_source=openai))
* Submit **quarterly updates** (Q1-Q4) covering your income and expenses through the year.([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
* Then file a **final declaration** after the tax year ends which replaces the traditional Self Assessment return.([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
## Key Deadlines & Phased Roll-Out
| Year | Qualifying Income Threshold | Start Date for MTD ITSA Phase |
|---|---|---|
| 2026-27 | £50,000+ | 6 April 2026 – submit quarterly updates starting in August 2026, annual declaration by 31 Jan 2028 ([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))|
| 2027-28 | £30,000+ | 6 April 2027 ([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))|
| 2028-29 | £20,000+ | 6 April 2028 ([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))|
## Compliance and Penalty Regime
- For the first 12 months from 6 April 2026, those joining the scheme will **not receive penalty points** for late quarterly updates.([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
- After that, a **points-based penalty system** applies: repeated late submissions accumulate points; **four points** lead to a flat £200 penalty. Points expire after two years.([gov.uk](https://www.gov.uk/government/news/act-now-864000-sole-traders-and-landlords-face-new-tax-rules-in-two-months?utm_source=openai))
## Practical Steps and Examples
- **Example**: Sarah is a landlord with £55,000 gross rental income (and minor freelance work). She's in scope for April 2026. She must get software, keep records, submit updates quarterly, and file a final declaration by 31 Jan 2028. Missed a deadline? The first slip won’t incur points until after the 12-month grace period.
- **Software choices**: Evaluate br idging tools if already using spreadsheets; otherwise invest in approved full accounting software. Compare costs and features.
- **Track-keeping**: Separate self-employment vs property, keep invoices, bank statements, receipts; make regular updates monthly or quarterly to avoid end-of-year scramble.
## What to Do Now
1. Confirm if your total qualifying income for 2024-25 was over £50,000. If yes, begin preparations.
2. Research and select HMRC-approved software.
3. Digitise records if not already;
4. Schedule reminders for quarterly deadlines (August, November, February, May).
5. Talk to your accountant or tax adviser if you share revenue across self-employment and property income, as your combined income might bring you into scope even if each individually is lower.