MTD for Income Tax became mandatory on 6 April 2026 — but 65% of eligible taxpayers have not registered. Here is what landlords, sole traders, and freelancers need to do right now.
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) became mandatory on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. This means the 2026/27 tax year is the first year where quarterly digital submissions to HMRC are required.
HMRC confirmed in the Autumn Budget 2025 that late submission penalties will NOT apply to quarterly updates during the 2026/27 tax year. This gives you time to set up software and get comfortable with the process — but you are still legally required to submit.
| Start Date | Qualifying Income | Who |
|---|---|---|
| 6 April 2026 | Over £50,000 | Sole traders and landlords (based on 2024/25 income) |
| 6 April 2027 | Over £30,000 | Sole traders and landlords |
| 6 April 2028 | Over £20,000 | Sole traders and landlords (expected, not confirmed) |
What counts as qualifying income: Gross self-employment income and gross property income (rental income before expenses). PAYE employment income, pensions, savings interest, and dividends do NOT count. If you have both self-employment and property income, they are combined.
Partnerships: Not yet included. HMRC has not confirmed a start date. Individual partners with separate sole trader or property income above the threshold must comply individually.
If your gross rental income from all properties exceeded £50,000 in 2024/25, you must comply from 6 April 2026. Key points for landlords:
1. Check your 2024/25 gross rental income against the £50,000 threshold. 2. Choose MTD-compatible software (Xero, QuickBooks, FreeAgent, or Sage). 3. Register for MTD via HMRC's online service. 4. Set up digital records for each property. 5. Submit your first quarterly update by 7 August 2026.
If your gross self-employment income exceeded £50,000 in 2024/25, you must comply. Key points:
CIS contractors: If you are a self-employed subcontractor with gross construction income over £50,000, you are included. CIS deductions do not reduce your qualifying income.
You must submit four quarterly updates plus a Final Declaration:
| Quarter | Period Covered | Deadline |
|---|---|---|
| Q1 | 6 April – 5 July 2026 | 7 August 2026 |
| Q2 | 6 July – 5 October 2026 | 7 November 2026 |
| Q3 | 6 October 2026 – 5 January 2027 | 7 February 2027 |
| Q4 | 6 January – 5 April 2027 | 7 May 2027 |
| Final Declaration | Full year | 31 January 2028 |
Important: Quarterly updates are data submissions, not tax payments. Your payment dates have not changed — you still pay by 31 January, with payments on account due 31 January and 31 July as before.
HMRC has scheduled planned maintenance for the MTD IT platform from 5pm Friday 12 June to 1pm Tuesday 16 June 2026. During this period, you will be unable to sign up for MTD, submit updates, or access the MTD online service. Plan your first quarterly submission accordingly.
You must use HMRC-approved software that submits quarterly updates directly to HMRC via the MTD API. You cannot file through HMRC's own website. The main options:
Use HMRC's Software Finder tool to check compatibility.
While penalties are waived for 2026/27, from the 2027/28 tax year the points-based system will apply:
Late payment penalties are separate and more proportionate than the old system — charged at different rates depending on how late you pay. The first 15 days are penalty-free.
Yes. From 6 April 2026, MTD ITSA is mandatory for sole traders and landlords with qualifying income over £50,000 in the 2024/25 tax year. You must keep digital records and submit quarterly updates using compatible software.
7 August 2026, 7 November 2026, 7 February 2027, and 7 May 2027. The Final Declaration is due by 31 January 2028.
No. HMRC confirmed that late submission penalties will not apply during the 2026/27 grace period. However, you must still submit the updates.
Gross self-employment income and gross property income (before expenses). PAYE, pensions, savings, and dividends do not count.
Not yet. The threshold drops to £30,000 from April 2027 and to £20,000 from April 2028. You can voluntarily sign up early.
HMRC-approved software that submits via the MTD API. Options include Xero, QuickBooks, FreeAgent, and Sage. AccTek includes Xero at no extra cost.
Not yet. Partnerships are excluded from the current rollout. Individual partners with separate sole trader or property income above the threshold must comply individually.
Register as soon as possible via HMRC's online service. While penalties are waived for 2026/27, you are still legally required to submit. Approximately 65% of eligible taxpayers have not yet registered.
We handle the full setup — software, HMRC registration, digital records, and all four quarterly submissions. Xero included. From £19.99/month.
This article is for general information only and does not constitute tax advice. Please consult a qualified accountant for advice specific to your circumstances.
