Status at 22 October 2026
Making Tax Digital (MTD) for Income Tax began on 6 April 2026 for people whose qualifying income was over £50,000. The next stage starts on 6 April 2027 for those over £30,000, and a third on 6 April 2028 for those over £20,000. GOV.UK states these dates and the Income Tax (Digital Obligations) Regulations 2026 set the thresholds. Partnerships are not included yet and have no date.
The short version
- MTD for Income Tax applies to sole traders and landlords registered for Self Assessment whose qualifying income is above a threshold.
- Qualifying income is your gross income (before expenses) from self-employment and property added together. It is not your profit.
- If you are in, you keep digital records in software, send quarterly updates and file your tax return through software.
| Qualifying income over | Measured on tax year | MTD starts |
|---|---|---|
| £50,000 | 2024 to 2025 | 6 April 2026 |
| £30,000 | 2025 to 2026 | 6 April 2027 |
| £20,000 | 2026 to 2027 | 6 April 2028 |
The 2025 to 2026 tax year runs from 6 April 2025 to 5 April 2026.
How the test works
HMRC checks the Self Assessment return you filed for the relevant tax year. If your qualifying income is over the threshold, it writes to confirm you must start. GOV.UK says that if you do not get a letter it is still your responsibility to check, sign up and be ready, so work out your own figure.
What counts as qualifying income
Your total self-employment and property income before expenses, from all your businesses combined. GOV.UK’s example is £25,000 of rent plus £27,000 of self-employment income, which makes £52,000. UK and foreign property both count for UK residents.
Other income does not count, for example dividends (including from your own company) and your share of partnership profit. Employment pay and pensions are not self-employment or property income, so they are left out too. If a period is not 12 months, income is adjusted to a full year. HMRC does this for sole traders, but with property you work it out yourself.
| Example | Qualifying income | Result |
|---|---|---|
| Rent £32,000, profit after costs £11,000 | £32,000 | Over £30,000, so MTD from 6 April 2027 |
| Rent £18,000 and £13,000 of freelance takings | £31,000 | Over £30,000 |
| Rent £24,000 and a £10,000 salary | £24,000 | Not over £30,000. Over £20,000, so possibly April 2028 if 2026 to 2027 is similar |
| Joint property earning £56,000, shared equally | £28,000 each | Not over £30,000. Over £20,000, so possibly April 2028 |
Joint property
Only your share counts. If you only get told your share after expenses have been taken off, HMRC uses that figure. You keep records of your share only and do not link them to your co-owner’s records.
In your quarterly updates for a jointly let property you can send income and expenses, or income only. If you leave expenses out, you report them after the year end by resending your fourth update before filing. Properties you own alone must be reported with expenses. All your UK properties count as one UK property business, so you do not need a separate set of records for each.
What changes once you are in
Digital records. You record each rent received and each expense in your software. You still keep your original receipts, invoices and bank statements.
Quarterly updates. Your software totals income and expenses for each business every three months. They are summaries, not tax returns, and each covers the tax year so far. You do not need to make tax adjustments first, and you send one even if nothing happened.
| Update period | 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 |
Those are the standard periods. If your accounting year is 1 April to 31 March you can choose calendar periods, but you must choose before sending your first update and cannot change afterwards.
Your tax return. After the year end you finish and submit the return through your software by 31 January, and add other income such as dividends. You still file an ordinary Self Assessment return for the year before you start.
Penalties. The system is points-based. GOV.UK says HMRC will not apply points for late quarterly updates in 2026 to 2027. After that, each missed deadline earns a point, and at four points there is a £200 penalty.
Software, and where spreadsheets fit
You need software that is compatible with MTD for Income Tax. HMRC has a tool to find it and does not recommend products, so we do not either. Check that it handles your accounting period, joint property and any other income.
A spreadsheet can hold your records, but it cannot send anything to HMRC. You then need compatible software, and the two must be digitally linked: linked cells, a file import or export, or an API. Once a record has gone into a quarterly update you must not copy it by hand or cut and paste it to another program. If one product does everything, no link is needed.
To sign up you must be registered for Self Assessment and have filed a return in the last two years, then choose and authorise your software.
Exemptions and leaving
Some people can be exempt, for example if they are digitally excluded, and GOV.UK has a page on which exemptions are automatic and which you must apply for. Once you are in, you can opt out if your qualifying income stays below the threshold for three tax years in a row.
A simple plan if you are over £30,000
- Add up gross rent and any self-employment takings for 6 April 2025 to 5 April 2026.
- Choose compatible software before April and sign up.
- From 6 April 2027, record every payment and expense in your software through the year.
- Put the four update deadlines in your diary.
- Keep your receipts and bank statements as usual.
Frequently asked questions
Is the £30,000 test about profit or income?
Income, before expenses. A landlord with £32,000 of rent and £11,000 of profit is over the threshold.
What if I am just under £30,000?
You are not in from April 2027, but the threshold falls to £20,000 for the 2026 to 2027 tax year, which brings people in from April 2028.
Do I need separate records for each property?
No. UK properties are legally one business, so your software adds them together.
I own a property with my spouse. Whose income is tested?
Each owner is tested on their own share of the rent.
Sources
Last checked 22 October 2026.
- Check if you need to use Making Tax Digital for Income Tax, GOV.UK
- Work out your qualifying income, GOV.UK
- Create digital records, send quarterly updates and submit your tax return, GOV.UK
- Choose the right software, GOV.UK
- The Income Tax (Digital Obligations) Regulations 2026, regulations 25 to 27, legislation.gov.uk
This guide is general information written from the official sources listed above and checked on 22 October 2026. It is not legal, tax or financial advice, and Plainfiles is not endorsed by any government body. Rules change, so check the linked official pages for your own situation. Written and designed by Plainfiles with the help of AI tools, then checked against the official legislation and guidance listed in the sources.