From April 2026, sole traders and landlords earning over £50,000 must submit quarterly digital updates to HMRC. This guide explains who is affected, what changes, and how to prepare.
Making Tax Digital (MTD) is HMRC’s programme to digitise the UK tax system. Under MTD for Income Tax, affected sole traders and landlords must keep digital records, use HMRC-compatible software, submit quarterly income and expense updates, and file a Final Declaration — replacing the traditional annual Self Assessment return.
MTD for VAT has been mandatory since April 2022. MTD for Income Tax Self Assessment (MTD ITSA) is the next phase — and it affects significantly more people. If you are self-employed or earn rental income, you need to understand what changes and when.
Under MTD ITSA, you must:
| MTD Phase | Start Date | Income Threshold |
|---|---|---|
| MTD for VAT | Already mandatory | All VAT-registered businesses |
| MTD for Income Tax — Phase 1 | April 2026 | Gross income over £50,000 |
| MTD for Income Tax — Phase 2 | April 2027 | Gross income over £30,000 |
Income is based on gross turnover before expenses from self-employment and UK property income combined. If your total qualifying income from these sources exceeds the threshold, MTD applies.
| Quarter | Period | Deadline |
|---|---|---|
| Q1 | 6 April – 5 July 2026 | 7 August 2026 |
| Q2 | 6 July – 5 October 2026 | 7 November 2026 |
| Q3 | 6 October – 5 January 2027 | 7 February 2027 |
| Q4 | 6 January – 5 April 2027 | 7 May 2027 |
| EOPS + Final Declaration | Full year | 31 January 2028 |
MTD for Income Tax applies to individuals with qualifying income above the threshold from:
MTD does not currently apply to:
The threshold is based on gross income (before expenses), not profit. A landlord with £55,000 in gross rental income but only £20,000 profit after mortgage interest and expenses is still above the £50,000 threshold and must comply from April 2026.
Your monthly AccTek fee covers all MTD submissions — no additional charges for quarterly updates or the Final Declaration.
MTD requires HMRC-recognised software that can:
AccTek includes Xero in every plan — fully MTD-compliant, with automated bank feeds, receipt capture via Dext and direct HMRC submission. You do not need to purchase or configure additional software.
Spreadsheets alone are not MTD-compliant. You can use them only if digitally linked to HMRC-approved bridging software — but this creates additional complexity and cost. Xero through AccTek is simpler, more reliable and included in your fee.
HMRC operates a points-based penalty system for late MTD submissions:
| Event | Consequence |
|---|---|
| Each missed quarterly submission | +1 penalty point |
| Reach 4 points (quarterly filers) | £200 fixed penalty |
| Each subsequent missed submission | £200 per submission |
| Late payment (1–15 days) | Interest from day 1 |
| Late payment (16–30 days) | 2% of tax outstanding at day 15 |
| Late payment (31+ days) | +2% of tax outstanding at day 30, then 4% annualised daily rate |
Points expire after 24 months of perfect compliance. AccTek files every submission on time — you never accumulate penalty points.
Making Tax Digital is HMRC’s programme to digitise UK tax reporting. Affected sole traders and landlords must keep digital records, submit quarterly updates and file a Final Declaration using compatible software — replacing the annual Self Assessment return.
Sole traders and landlords with total qualifying gross income (self-employment + UK property) over £50,000 per year. From April 2027, the threshold drops to £30,000. Income is measured before expenses, not profit.
For those in scope from April 2026, the first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026. AccTek handles registration and ensures your first submission is filed on time.
No. Quarterly submissions are reporting requirements, not payment deadlines. Tax payment dates remain 31 January and 31 July (payments on account). MTD does not change when you pay — only how often you report.
HMRC-recognised MTD-compatible software that maintains digital records and submits quarterly updates. AccTek includes Xero in all plans — fully compliant with automated bank feeds and direct HMRC submission.
Only if digitally linked to HMRC-approved bridging software. Manual copying between spreadsheets and a submission tool is not compliant. Xero through AccTek is simpler, more reliable and included in your monthly fee.
Each missed submission earns one penalty point. At four points, HMRC charges a £200 penalty. Each subsequent missed submission incurs another £200. Points expire after 24 months of perfect compliance. AccTek files every submission on time.
The Final Declaration replaces the traditional Self Assessment return. It is submitted by 31 January after the tax year ends, confirming your total income, expenses, allowances and tax liability. AccTek prepares and files this as part of your service.
Xero included • Quarterly submissions • Final Declaration • Fixed monthly fees
Godwin Pinto ACA is a chartered accountant and founder of AccTek with 20+ years of experience accounting and tax for contractors, startup and SME .
AccTek is a member firm of the Institute of Certified Practising Accountants (ICPA). Our accountants have a wide range of qualifications and accreditations from trusted professional bodies such as the AAT, ICPA, and ACCA.
