MTD for Income Tax: what changes and when

The basics

What is Making Tax Digital for Income Tax?

Who is in

Who has to use MTD for Income Tax?

You need to use it if you are registered for Self Assessment, you have income from self-employment, property or both, and your qualifying income is over the threshold. HMRC uses an earlier tax return to decide when you start. Our MTD checker works it out for you.

• Covered: sole traders and landlords, including people with a job and a side business or a rental property.
• Not covered yet: partnerships, which will join later on dates HMRC has not set.
• Not covered: limited companies, which pay corporation tax rather than income tax on their profits.

The number that decides it

How qualifying income is worked out

Add your gross self-employment income to your gross property income, before expenses. Nothing else counts: not a salary, a pension, dividends or a share of partnership profits.

If you live in the UK, overseas rental income counts too. If you live abroad, only your UK property income counts. And once you are in, you can only leave after your income has stayed below the threshold for 3 tax years in a row.

What you send

Quarterly updates and the tax return

Each quarterly update covers the tax year so far, starting from 6 April. If your accounts run from 1 April to 31 March, you can use calendar quarters instead, with the same deadlines.

After the fourth update, you make any year-end adjustments and file your tax return through your software by 31 January, which is also when the tax is due. Each self-employment and each property business gets its own updates. The MTD deadline calendar adds every date to your phone or Outlook.

Software

Software, spreadsheets and bridging tools

Penalties

What happens if you miss a deadline

Exemptions

Who is exempt

You are exempt without applying if your qualifying income is £20,000 or less, or you did not have a National Insurance number before the tax year started. You can apply for an exemption if your age, a health condition or disability, your religious beliefs or having no internet access means it is not reasonable for you to use software. HMRC will not accept being unfamiliar with software, or the extra time or cost, as your only reason.

Signing up

How you sign up

HMRC writes to people whose returns show they need to join, but it is still your job to check. You sign up on GOV.UK using your Self Assessment login, and you need to be registered for Self Assessment and have filed a return in the last two years. Your accountant can sign you up instead. Our guide to signing up for MTD lists what you need.

Questions people ask

MTD for Income Tax: your questions

Guides

Making Tax Digital for the self-employedWhat changes for sole traders from April 2027.Making Tax Digital for landlordsRental income, joint ownership and overseas property.Self-employed tax calculatorHow much tax and NI to set aside each quarter.Self-employed mileage calculatorThe 55p rate or actual costs: which claims more.MTD deadline calendarEvery update and payment date, added to your calendar.Do I need to use Making Tax Digital?Check your qualifying income and start date.MTD software or an accountant?Software, spreadsheets and bridging tools compared.How to sign up for Making Tax DigitalSigning up yourself, or letting an accountant do it.MTD penalties and exemptionsPenalty points, late payment and who is exempt.Accountants for small businessWhat they do, what to ask and what they cost.MTD for builders and CIS subcontractorsHomeowner and contractor work, CIS and the reverse charge.MTD for plumbers and electriciansDeposits, van stock, scheme fees and card payments.MTD for taxi and delivery driversSeveral apps, platform reports and car costs.MTD for hair and beautyRent-a-chair, tips, products and mobile work.MTD for cleaners and carersMany small clients and travel between them.