Compliance
Making Tax Digital for Income Tax: New Digital Obligations since April 2026
HMRC’s Income Tax (Digital Obligations) Regulations 2026 came into force 1 April 2026. If you're a landlord or sole trader above certain income thresholds, there are new digital reporting and quarterly update requirements you need to know.
By NomadicTax Research Team • 6 min read • August 28, 2026
## What Are the New Obligations?
- The **Income Tax (Digital Obligations) Regulations 2026** came into force on **1 April 2026**. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2026/336/pdfs/uksiem_20260336_en_001.pdf?utm_source=openai))
- Most unincorporated businesses and landlords now must file **quarterly digital updates** and submit an **annual digital return** using Making Tax Digital (MTD)-compatible software. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2026/336/pdfs/uksiem_20260336_en_001.pdf?utm_source=openai))
- Digital records and reporting aligned to **calendar quarters**. There are targeted exemptions where it would be unreasonable to use digital methods. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2026/336/pdfs/uksiem_20260336_en_001.pdf?utm_source=openai))
## Who Is Affected?
- Sole traders and landlords with income above defined thresholds—previously only those above £50,000 are in scope; the regulations phase by income. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2026/336/pdfs/uksiem_20260336_en_001.pdf?utm_source=openai))
- Certain categories such as ministers of religion and Lloyd’s underwriters are exempted or subject to different rules. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2026/336/pdfs/uksiem_20260336_en_001.pdf?utm_source=openai))
## Practical Impact & Examples
- Your accounting system/software must be MTD-compatible to allow submission of quarterly data.
- Quarterly deadlines now matter; late digital submissions may attract penalties under the new regime.
- **Example**: John, a landlord who earns £45,000/year rental profit, previously filed one Self Assessment annual return. Under these regulations, if income triggers the threshold, he may have to report in quarterly chunks (e.g. Apr-Jun, Jul-Sep, etc.) and then an annual summary.
## Actions to Take
- **Check your income levels**: determine whether you cross the threshold and are in scope.
- **Upgrade software**: ensure you have accounting packages that integrate with HMRC’s APIs and can handle quarterly updates.
- **Plan cash flow**: Quarterly updates mean more frequent reporting and perhaps estimated liabilities—budget accordingly.
- **Talk to your tax agent**: Make sure you understand deadlines, exemptions, and how to navigate the regime.
## Exemptions & Flexibilities
- Some taxpayers may receive targeted exemptions if digital use is unreasonable given their circumstances.
- Option exists to align digital reporting periods with calendar quarters.
- The UK government has added built-in easements during the transition period.
**Bottom Line**: The era of single annual reporting for many unincorporated businesses and landlords is over. Quarterly digital updates, annual digital returns, and stricter software requirements are now standard in MTD as of April 2026. Get your systems and record-keeping in order.