Making Tax Digital for Income Tax (often shortened to MTD for Income Tax, or MTD ITSA) is the biggest change to Self-Assessment in a generation. Instead of one tax return a year, sole traders and landlords above an income threshold will keep digital records and send HMRC a quarterly update, then a final declaration after the tax year ends. The checker above tells you which start date applies to you based on your income.
The rules are being phased in by income level, and the key figure is your gross qualifying income, not your profit. That trips a lot of people up, so it is worth understanding before you decide what software you need and when.
Who has to use MTD for Income Tax, and from when?
You are brought into MTD for Income Tax once your combined gross income from self-employment and property reaches the threshold for that wave. The thresholds step down over three years, as set out in HMRC's Making Tax Digital for Income Tax guidance.
| Combined gross income | You are mandated from |
|---|---|
| Over £50,000 | 6 April 2026 |
| Over £30,000 | 6 April 2027 |
| Over £20,000 | 6 April 2028 |
| £20,000 or under | Not yet in scope |
The income test combines your self-employment turnover and your property rents. If you have £40,000 of self-employment income and £15,000 of rents, your qualifying income is £55,000, so you are caught from 6 April 2026 even though neither source on its own is over £50,000.
The gross-not-profit trap
This is the single most important point. Qualifying income is your gross income, your turnover and rents before you take off any expenses. It is not your taxable profit. A sole trader with £60,000 of sales and £35,000 of costs has a profit of £25,000, but their qualifying income is £60,000, so they are mandated from 6 April 2026. Always test the threshold on the top line, not the bottom line.
What actually changes once you are in?
Once you are mandated, three things change. First, you must keep your business and property records digitally in compatible software rather than on paper or a basic spreadsheet. Second, you send HMRC a quarterly update summarising your income and expenses, due on 7 August, 7 November, 7 February and 7 May. Third, after the tax year ends you submit a final declaration that brings everything together, replacing the old Self-Assessment return, with any tax still due by the usual 31 January.
The quarterly updates are running totals, not separate bills, so you are not paying tax four times a year. They are a digital check-in. Your payment dates do not change.
How to get ready
If the checker says you are in scope, the practical steps are to pick MTD-compatible software, get your record-keeping onto it before your start date, and make sure someone is set up to file the quarterly updates on time. Many of our clients prefer to hand the quarterly cycle to us so they can carry on running the business. If you would like a hand getting set up, our tax advisory team can walk you through it.
Related guides and calculators
Frequently asked questions
Who has to use Making Tax Digital for Income Tax?
Sole traders and landlords whose combined gross income from self-employment and property is above the threshold for that year. The phase-in is over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. If your combined gross income is £20,000 or under, you are not yet in scope.
Is the MTD threshold based on profit or turnover?
It is based on gross income, meaning your turnover and rents before expenses, not your profit. A sole trader with £60,000 of sales and £35,000 of costs has £25,000 of profit but £60,000 of qualifying income, so they are mandated from 6 April 2026. Always test the threshold on your gross income.
Does property income count towards the MTD threshold?
Yes. Your qualifying income is your self-employment income and your property income added together. With £40,000 of self-employment income and £15,000 of rents, your combined gross income is £55,000, so you are caught from 6 April 2026 even though neither figure on its own is over £50,000.
What are the quarterly update deadlines for MTD for Income Tax?
Once you are mandated you send HMRC a quarterly update by 7 August, 7 November, 7 February and 7 May, followed by a final declaration after the tax year ends. The updates are running totals, not separate tax bills, and your payment dates do not change.
What changes when I join MTD for Income Tax?
You keep your records digitally in compatible software, send four quarterly updates a year, and submit a final declaration that replaces the old Self-Assessment tax return. Any tax due is still payable by the usual 31 January.