It started on 6 April 2026 and the first quarterly deadline has already passed. Who is in now, who joins in 2027 and 2028, what a quarterly update actually involves, and why HMRC has begun signing qualifying taxpayers up automatically.
Published Last reviewed 1,896 words
It has started. Making Tax Digital for Income Tax came into force on 6 April 2026 for qualifying sole traders and landlords with qualifying income over £50,000, subject to HMRC exemptions, and the first quarterly deadline for that group was 7 August 2026.
So if you are in the first group, this is not something to prepare for. It is something you are either doing or not doing. HMRC reported on 12 August 2026 that 436,000 sole traders and landlords had sent a first quarterly update and more than 570,000 had signed up.
From September 2026 HMRC began signing up people who should already be using MTD but had not signed themselves up. Its own words are that taking action now "means you stay in control", rather than waiting to be enrolled. If HMRC signs you up, you still need to choose and authorise compatible software and catch up with the required digital records and quarterly updates.
It applies to sole traders and landlords registered for Self Assessment, phased in by income. The tax year in the middle column is the one HMRC looks at to decide whether you are in.
| Qualifying income over | On the return for | You join from |
|---|---|---|
| £50,000 | 2024 to 2025 | 6 April 2026 (in force now) |
| £30,000 | 2025 to 2026 | 6 April 2027 |
| £20,000 | 2026 to 2027 | 6 April 2028 |
HMRC reviews your Self Assessment return each year and writes to you if you are over the threshold. That letter is a courtesy rather than the trigger: the obligation is yours to check, and not receiving one is not a defence.
This is where most of the confusion sits, and it is worth being precise because it decides whether you are in or out.
Qualifying income is your gross income before expenses, from self-employment and property combined. It is not your profit.
A sole trader turning over £62,000 with £20,000 of costs has a profit of £42,000 and qualifying income of £62,000. They are in the first group, and they are in it now. We have had this conversation more than once with people who had done the arithmetic on the wrong number and concluded they had two more years.
If you have both a trade and a rental property, the two are added together. A modest self-employment alongside one let can clear a threshold that neither would reach alone.
Four updates a year, on fixed dates, using compatible software. The standard periods run with the tax year.
Before the dates, what the thing actually is, because the name misleads people into expecting a small tax return. A quarterly update is a summary of your digital income and expense records, not a tax return. You do not normally make year-end accounting or tax adjustments before sending it. And if you have more than one self-employment or property business, an update is required for each business.
| Period covered | Deadline |
|---|---|
| 6 April to 5 July | 7 August |
| 6 April to 5 October | 7 November |
| 6 April to 5 January | 7 February |
| 6 April to 5 April | 7 May, in the following tax year |
These are the standard update periods. Businesses with accounting periods running from 1 April to 31 March can use calendar update periods instead, starting on 1 April. The four submission deadlines remain the same.
Look at that left-hand column again, because it is the detail most coverage gets wrong. Every period starts on 6 April. In HMRC's words: "Each time you send a quarterly update it will cover from the start of the tax year to the end of the update period, not just the previous three months."
Each update is cumulative, in other words. That is better news than it sounds, because a figure you got wrong in the first quarter can be corrected in the second rather than needing an amendment. It also means the fourth update is a restatement of the whole year, and you cannot file your tax return until the updates are in.
Worth saying plainly, because it causes real anxiety. Joining Making Tax Digital in 2026/27 does not change how you deal with the year before it.
The 2025/26 return is filed through the normal Self Assessment process, on the normal deadline of 31 January 2027. Quarterly updates in 2026/27 relate to the 2026/27 tax year. You are running one system for the year that has finished and another for the year you are in, and that overlap is a one-off rather than the new normal. Our tax return service covers both sides of it.
Some MTD exemptions apply automatically, while others must be claimed, and the difference is worth knowing before you assume either way.
Digital exclusion may apply where it is not reasonable for someone to use digital tools because of factors such as age, disability, health, religious beliefs or lack of suitable internet access. That one has to be applied for. Others do not: a number of categories of income and taxpayer sit outside the rules without anybody having to ask.
Partnerships are not currently required to use MTD for Income Tax, and an individual's share of partnership profit does not count towards their qualifying income for these rules. Personal self-employment or property income is a separate matter and does count.
If you think an exemption may apply, check the position with HMRC or your accountant rather than assuming you are outside the rules.
One more thing about the four updates, because it is the most common misunderstanding of the whole regime. The quarterly updates do not replace the annual tax return. After the tax year you still need to make any required adjustments, add other income and gains, and submit your return through compatible software by 31 January following the end of the tax year.
HMRC has said that no penalty points are being issued for late quarterly updates during the 2026/27 tax year. That is a deliberate soft landing for the first cohort while everybody learns the system.
Two cautions. It applies to the quarterly updates, not to the tax itself, and it is a first-year concession rather than a permanent feature. Treating a soft landing as a reason to leave the software until next year is how a business arrives at April 2027 with twelve months of unrecorded transactions and a deadline in four weeks.
It is worth knowing what the concession is a concession from, because the regime underneath it is already published. For tax years after 2026/27, HMRC's guidance is that a penalty point is issued for each quarterly update or tax return deadline missed, the threshold is four points, and reaching it brings a £200 penalty. Points are not charges in themselves, which is what makes the fourth one expensive: three missed deadlines nobody chased can turn the fourth into a bill. Late payment of the tax is penalised separately from this, and interest runs on top.
A spreadsheet can form part of an MTD-compliant system, provided it is digitally linked to compatible bridging or submission software. What does not meet the requirement is a spreadsheet on its own, with the figures retyped into something else at the end of the quarter. We have written a fuller piece on choosing accounting software if you are weighing the options. Most businesses will be better served by proper accounting software, and the practical question is which one.
Depending on the software and subscription selected, the differences that matter are bank feed quality, how the quarterly submission is handled, whether your accountant can work in the file alongside you, and cost. We work day to day in Xero, QuickBooks and FreeAgent, and no single package suits every business. If you are choosing now, setting it up properly once is considerably cheaper than migrating twice.
You have time, and the most useful thing to do with it is not to wait. The £30,000 group is decided on the 2025/26 return, which is the one being prepared now, so you can already tell whether you are in.
Four things worth doing in the meantime:
It would be dishonest to present this as universally welcomed, because it is not, and the criticism is worth knowing about if you are being asked to change how you work.
HMRC's own position is positive, and the man running the programme said so in August 2026, once the first quarterly deadline had passed.
It's fantastic to see so many sole traders and landlords successfully sending their first quarterly updates.
The number behind that sentence matters more than the sentiment does. A government department is always going to be pleased with its own launch, but 436,000 first updates actually filed is the best evidence available that the system works in practice rather than only on paper. If you are dreading your first submission, it is worth knowing that a lot of people like you have already got through one.
The tax profession has been more sceptical for longer, and the fullest picture of that comes from a joint CIOT and ATT survey of over 500 members published in August 2023, so it records apprehension before the regime began rather than experience of it since. It found 70% thought April 2026 was an unrealistic start date, 95% lacked confidence in HMRC's ability to introduce it, and 87% doubted it would close the tax gap.
HMRC's insistence that MTD will make lives easier, as well as closing the tax gap, continues to be met with scepticism. There is a real lack of confidence that a convenient, user-friendly and effective system will be ready to go by April 2026.
Read that against the filing figures rather than instead of them, because both are informative and they are three years apart. The confidence problem in 2023 was real and the system did start on time and is running. What has not changed is the practical point underneath the scepticism, and it is the one worth taking away: do not expect the quarterly updates to replace anything you already do. They sit on top of the year-end work, which still has to happen. Either way it is the law now for the first group, and the sensible response to a system you did not ask for is to be good at it rather than late for it.
Yes. It came into force on 6 April 2026 for qualifying sole traders and landlords with qualifying income over £50,000, subject to HMRC exemptions. The first quarterly deadline for that group was 7 August 2026, and HMRC reported that 436,000 people had filed a first update.
Over £50,000 of qualifying income on the 2024 to 2025 return brings you in from 6 April 2026. Over £30,000 on the 2025 to 2026 return brings you in from April 2027, and over £20,000 on the 2026 to 2027 return from April 2028.
No, and this is the most common misunderstanding. Qualifying income is gross income before expenses, from self-employment and property combined. A sole trader turning over £62,000 with £20,000 of costs has qualifying income of £62,000, not £42,000, so is in the first group.
7 August, 7 November, 7 February and 7 May. Each update covers from the start of the tax year to the end of that period rather than just the previous three months, so the figures are cumulative and an earlier error can be corrected in a later update.
No. If you joined Making Tax Digital in 2026/27, the 2025/26 return is still filed through the normal Self Assessment process by 31 January 2027. Quarterly updates relate to the 2026/27 tax year onwards.
From September 2026 HMRC began automatically signing up eligible customers who had not already registered. HMRC has said that acting first means you stay in control of the process and can choose your own software rather than waiting to be enrolled.
HMRC has said no penalty points are being issued for late quarterly updates during the 2026/27 tax year, as a first-year softening. That concession applies to the updates rather than to the tax itself, and it is not a permanent feature. For tax years after 2026/27, HMRC guidance is that each missed quarterly update or tax return deadline earns a penalty point, the threshold is four points, and reaching it brings a £200 penalty. Late payment of the tax is penalised separately.
Yes, in the right setup. A spreadsheet can form part of an MTD-compliant system where it is digitally linked to compatible bridging or submission software. What does not meet the requirement is a spreadsheet on its own, with figures retyped into something else. Most businesses find compatible accounting software simpler. Depending on the software and subscription selected, the differences that matter are the bank feed, how submissions are handled, and whether your accountant can work in the file alongside you.
Every figure on this page was checked against the sources above on . Rates and thresholds change. If you are reading this long afterwards, check the current position before you act on it.
If you are already in scope, or your 2025/26 qualifying income is likely to exceed £30,000, we can check your MTD position, your digital records and your software setup, and explain what needs to be done before your next quarterly deadline.
What this touches
A new 40% first-year allowance arrived on 1 January 2026 and has been reported almost everywhere as good news for business investment. For a business spending inside the £1m Annual Investment Allowance it is a worse claim than the one it already had, and the change that does land is the one underneath it.
From April 2028 trading small companies and micro-entities have to file a profit and loss account, abridged accounts disappear, and the web and paper routes for filing accounts close. There is an opt-out from publishing the figures, and a lot of what you will read still gives the wrong year.
Since 6 April 2026 Statutory Sick Pay can be payable from the first full qualifying day rather than after three waiting days, and the earnings floor that excluded the lowest paid has gone. For an employer with real absence, this is a payroll cost change rather than a paperwork one.
