Making Tax Digital for Income Tax has started: what sole traders and landlords need to do

If you are self-employed or a landlord, the way you report to HMRC changed in April 2026. Making Tax Digital for Income Tax is no longer on the horizon. It is here, the first deadline lands on 7 August 2026, and thousands of people are in the system this year whether they noticed or not.

What has actually changed

For decades the deal was simple: one Self Assessment return, once a year. Under Making Tax Digital (MTD) for Income Tax, that single return is replaced by digital record keeping, four quarterly updates sent to HMRC through approved software, and a final declaration at the end of the year that confirms your overall tax position.

Paper records and spreadsheets typed up in January no longer cut it. Your income and expenses must be recorded digitally, and the updates must go to HMRC through MTD-compatible software.

Are you caught by it this year?

You are in from April 2026 if the combined gross income from your sole trade and your property lettings was more than £50,000 on your 2024/25 tax return. Two things trip people up here:

• It is gross income, not profit. A landlord with £52,000 of rent and £30,000 of costs is still over the line.
• Trade and property income are added together. Trading receipts of £29,000 plus rents of £22,000 puts you in, even though neither alone would.

The new deadlines

Quarterly updates for the 2026/27 tax year are due as follows:

• Quarter 1 (6 April to 5 July): due 7 August 2026
• Quarter 2 (to 5 October): due 7 November 2026
• Quarter 3 (to 5 January): due 7 February 2027
• Quarter 4 (to 5 April): due 7 May 2027

The final declaration for 2026/27, which replaces the old Self Assessment return, is due by 31 January 2028. Your tax payment dates do not change.

What happens if you miss one

HMRC uses a points system, a bit like a driving licence. Each late submission earns a point, and at four points you receive a £200 penalty, with a further £200 for each late submission after that. HMRC has signalled a lighter touch on quarterly updates in this first year, but the final declaration remains under the normal late filing penalties, and points still build a habit you do not want.

Not over £50,000? Your turn is coming

The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. If your gross trade and property income is anywhere near those figures, the smart move is to get your records digital now, on your own timetable, rather than in a scramble later.

What to do now

• Check your 2024/25 return and add together your gross self-employment and property income.
• If you are over £50,000, make sure you are signed up and using MTD-compatible software today, because the 7 August deadline covers a quarter that has already happened.
• If you are under the threshold, start keeping digital records anyway and glide into MTD rather than crash into it.

Or skip the homework and hand it to us. At Strategic Ridge Accounting we set clients up on MTD-compatible software, keep the records clean all year, and file every quarterly update and the final declaration as part of one fixed monthly fee. No January panic, no penalty points, no surprises.

Get in touch and we will tell you exactly where you stand before the next deadline.

Not sure which dates apply to you? Every MTD, Self Assessment and company deadline for the year is on our UK tax deadlines page, with a free printable rates card.