Making Tax Digital for Income Tax: who is in, and when

Making Tax Digital for Income Tax replaces one annual Self Assessment return with digital record keeping, four quarterly updates, and a final declaration. If you are self-employed or receive rental income, it will reach you — the only question is which year.

The timetable

What counts as qualifying income

This is the detail people most often get wrong. Qualifying income is your gross income from self-employment and property, before deducting any expenses. Not profit. Gross.

It is also the combined total of both sources. Someone with £28,000 of freelance turnover and £24,000 of rent has £52,000 of qualifying income and was in from April 2026, even though neither source alone would have crossed the line and their actual profit might be far lower.

Employment income, dividends, pensions and savings interest do not count towards the threshold. Nor does income from a limited company — MTD for Income Tax applies to individuals, not companies. Companies already file under a separate regime, and their year-end obligations are unchanged.

What actually changes

Digital records

You must keep records of income and expenses digitally, in software that is MTD-compatible. A shoebox of receipts and a spreadsheet reconciled each January will no longer meet the requirement. Where a spreadsheet is used, it needs bridging software and an unbroken digital link — retyping figures breaks the chain.

Quarterly updates

Four times a year you submit a summary of income and expenses for the quarter. Standard quarters end on 5 July, 5 October, 5 January and 5 April, with submission due about a month later — 7 August, 7 November, 7 February and 7 May.

You can elect to use calendar quarters instead, ending 30 June, 30 September, 31 December and 31 March, which most people find easier to reconcile against bank statements.

Importantly, these updates are summaries, not tax calculations. Nothing extra becomes payable each quarter. Your tax payment dates do not change.

Final declaration

After the year ends you make a final declaration, adding anything the quarterly updates did not cover — other income, reliefs, adjustments and accounting elections. This replaces the Self Assessment return and is still due by 31 January.

So that is five submissions, not one

Yes. And per business — someone with a trade and two rental properties reports the trade and the property business separately within the same quarterly cycle.

The honest assessment is that MTD increases the administrative burden for anyone whose bookkeeping is currently done once a year in a hurry. It reduces it for anyone already using cloud software with connected bank feeds, because the data is largely there already and the quarterly submission is close to a button press.

Which of those two you are is the thing to sort out now.

Exemptions

Some people are outside the regime or can apply to be excluded, including those who are digitally excluded for reasons of age, disability, remoteness of location or religious belief, and certain trustees and personal representatives. Exemption is not automatic — it must be applied for and granted.

What to do now

1. Work out your qualifying income. Take gross self-employment turnover plus gross rental income from the relevant year's return and add them together.
2. Find your wave. £50,000 means you are already in. £30,000 means April 2027. £20,000 means April 2028.
3. Move to compatible software early. Do not wait for the deadline. Start recording digitally a full year ahead so that the first mandatory quarter is routine rather than an emergency.
4. Connect the bank feed. This is what turns quarterly reporting from a chore into a review, because the transactions arrive on their own.
5. Consider a calendar-quarter election if your bookkeeping naturally runs to month ends.

MTD thresholds and dates were correct at the time of writing and have been revised more than once. Check your own position with us or on GOV.UK before relying on this.