Making Tax Digital for Income Tax: Self-Employed & Landlords Over £50,000

What Is MTD for Income Tax and Who It Affects?

Making Tax Digital for Income Tax (MTD IT) is a UK-government initiative that requires certain taxpayers to keep digital records and send quarterly updates to HMRC using compatible software, plus an annual digital Self Assessment. As of 6 April 2026, this applies to sole traders and landlords whose qualifying income—turnover from self-employment and/or property income—is over £50,000. (gov.uk)

Dates when lower thresholds come into force:

• April 2027: over £30,000 qualifying income.
• April 2028: over £20,000 qualifying income. (gov.uk)

Key Compliance Requirements

• Digital records: Income and expenses must be recorded electronically in software compatible with HMRC’s system. Paper only for supporting documents. (gov.uk)
• Quarterly updates: Summaries for each income source every three months, using compatible software. Deadlines for 2026-27 are:
  • First: by 7 August 2026
  • Second: by 7 November 2026
  • Third: by 7 February 2027
  • Fourth: by 7 May 2027 (gov.uk)
• Final tax return: still submitted by 31 January after end of tax year; quarterly updates don’t replace the full return. (gov.uk)

Timeline & Sign-Up Process

• April 2026: Record-keeping starts for those over £50,000. (gov.uk)
• September 2026: HMRC begins automatic sign-ups of those who are required but haven’t yet signed up. (gov.uk)

Steps to take now:

1. Use HMRC’s software finder to pick MTD-compatible software.
2. Sign up through your HMRC or agent services account.
3. Start creating digital records (income, expenses) so that they’re ready for your first quarterly update.
4. Check whether you might be exempt or eligible for relief if digitally excluded. (gov.uk)

Practical Example

Jonathan is a landlord with property income of £60,000 per year, and no self-employment income.

• As of 6 April 2026, he must use MTDIT.
• His first quarterly update (covering 6 April to 5 July 2026) must be sent by 7 August 2026. He uses compatible software to record income and expense transactions for that period throughout.
• At end of year, he submits normal Self Assessment by 31 January 2027.

Suggestions to Lower Costs & Manage Transition

• Automate records using accounting software with bank feed integration.
• Ensure agent or accountant is properly authorised (if using one).
• Review income projections—if trending toward the threshold, good to anticipate demands ahead.

Take-Away Message Don’t wait for deadlines. If over £50,000 income, sign up now, digitalise your record keeping, send quarterly updates, and stay on top of your final return. The move to digital is here—and it’s mandatory for many.