Compliance
Preparing for Making Tax Digital (MTD) for Income Tax: What UK Self-Employed and Landlords Need to Know
From April 6, 2026, many with self-employment or property income must report via digital records and quarterly updates—this article helps you understand compliance steps, software choices, and deadlines.
By NomadicTax Research Team • 5-8 min read • August 29, 2026
## Why Making Tax Digital (MTD) for Income Tax Matters
Beginning **6 April 2026**, certain UK taxpayers with **self-employment or property income over £50,000 gross** must comply with MTD for Income Tax. Under these rules you must:
- keep **digital records** of income and expenses using compatible software;
- send **quarterly summary updates** to HMRC;
- file an **annual Self Assessment** tax return. ([gov.uk](https://www.gov.uk/guidance/get-ready-for-mtd-an-agent-toolkit/guidance-and-other-useful-information?utm_source=openai))
Failure to comply can lead to penalties including **penalty points**, particularly from the 2027-28 tax year where late quarterly updates or tax returns will carry penalty points. ([gov.uk](https://www.gov.uk/guidance/get-ready-for-mtd-an-agent-toolkit/guidance-and-other-useful-information?utm_source=openai))
## Practical Steps to Stay Compliant
| Task | Deadline or When Needed | What to Do |
|------|-------------------------|------------|
| Determine if you qualify | Check gross turnover from self-employment + property income | If over £50,000, you must use MTD for IT from 6 April 2026. ([gov.uk](https://www.gov.uk/guidance/get-ready-for-mtd-an-agent-toolkit/guidance-and-other-useful-information?utm_source=openai)) |
| Choose software | Before your first update (next deadline after April 2026) | Use HMRC-approved software; ensure it can handle expenses, income coding, and bulk uploads if many income sources. |
| Register for MTD | Before first required quarterly update | Sign up via HMRC online services or agent; include all relevant self-employed or property income sources. ([gov.uk](https://www.gov.uk/government/publications/edition-5-making-tax-digital-for-income-tax-software-developer-newsletter/edition-5-making-tax-digital-for-income-tax-software-developer-newsletter?utm_source=openai)) |
| Submit quarterly updates | 7 August 2026; 7 Nov 2026; 7 Feb 2027; 7 May 2027 | Use software to summarise records; even if income stopped, include the ceased portion in first update and last if ceasing. ([gov.uk](https://www.gov.uk/government/publications/edition-5-making-tax-digital-for-income-tax-software-developer-newsletter/edition-5-making-tax-digital-for-income-tax-software-developer-newsletter?utm_source=openai)) |
| Watch for HMRC communication | From Sept 2026 onwards | HMRC will send letters to those who qualify but haven't signed up, possibly signing you up on your behalf if we find your 2024-25 turnover qualifies. ([gov.uk](https://www.gov.uk/guidance/get-ready-for-mtd-an-agent-toolkit/guidance-and-other-useful-information?utm_source=openai)) |
## Example: Jill the Landlord
Jill rents out two properties and also does freelance graphic design. Her combined turnover from rent + self-employment in 2024-25 was £55,000. She must use digital software, send joint quarterly updates from both income sources, report expenses properly, and file her Self Assessment return as usual. If she misses a quarterly update deadline in the 2026-27 year, she will get a **penalty point**. She should have chosen software before her first update due 7 August 2026. |
## Actionable Advice to Make It Easier
- **Start early**: even if turnover is just under threshold—understanding the process is useful as thresholds are reviewed.
- **Organise records** by income source and expense category; use tools that integrate bank feeds to reduce manual entry.
- **Engage a tax agent** if you’re unsure status of income sources or how to claim expenses properly.
- **Don’t ignore communications** from HMRC—they’ll warn you, but assuming they won’t enforce penalties is risky.
## How This Impacts Your Tax Planning
- Digital record-keeping allows more accurate forecasting and cashflow planning.
- Splitting income and expenses cleanly can prevent disputes or misunderstandings with HMRC.
- If expenses from property income or self-employment are high, a proactive review could identify additional reliefs (e.g. capital allowances, mortgage-related reliefs) that reduce taxable profit.
**Bottom line**: for anyone with self-employment or property income over £50,000, MTD for Income Tax is now the norm. Get organised, choose good software, and mark those quarterly dates—it’s not just compliance, it’s modernising how we do tax in the UK.