Making Tax Digital for Income Tax 2026

Making Tax Digital (MTD) for Income Tax is HMRC's move to digital record-keeping and regular updates for many sole traders and landlords. From 6 April 2026, people above the first income threshold must keep digital records and send quarterly updates using compatible software, then still file a tax return by the following 31 January.

This guide is general information based on published GOV.UK guidance at the time of writing. Thresholds, dates and exemptions can change. It is not regulated tax advice for your situation. Check GOV.UK: find out if and when you need to use MTD for Income Tax and speak to a qualified accountant before you act.

How Ask Alfred™ fits

Ask Alfred™ helps UK small businesses stay ready on cash, tax timing and year-end packs through Cashwatch™ and YearReady™. Alfred prepares and surfaces issues. A qualified professional signs off anything regulated. MTD for Income Tax filing itself is an HMRC software obligation: choose recognised software with your accountant, and do not treat this page as a product claim that Alfred submits your MTD updates.

What changes for small businesses

If you are in scope, the big shift is rhythm. Instead of gathering a year of paper (or scattered spreadsheets) once for Self Assessment, you keep digital records through the year and send HMRC light-touch quarterly updates of income and expenses.

Digital records of self-employment and/or property income and expenses, created and stored in compatible software.
Quarterly updates to HMRC. These are summaries of income and expenses for the quarter. They are not full tax returns.
An end-of-year tax return still due by 31 January after the tax year, using compatible software that already holds your quarterly information.

HMRC does not provide the software itself. You (or your agent) choose HMRC-recognised software that can keep records, send quarterly updates, and submit the return. See GOV.UK: choose the right software.

Who it applies to (and who it does not)

MTD for Income Tax is aimed at individuals in Self Assessment with self-employment and/or property income above the relevant threshold. Typical examples: sole traders and landlords.

It is not the same as corporation tax for limited companies, and it is separate from Making Tax Digital for VAT (which many VAT-registered businesses already use). If you trade through a limited company, your company accounts and corporation tax process still matter. Use the UK year-end accounts checklist for that pack, and ask your accountant how any personal Self Assessment income (for example a property side line) interacts with MTD for Income Tax.

The phased income thresholds

According to GOV.UK, when you must start depends on your qualifying income (self-employment and property income as HMRC defines it for MTD). The published phases are:

From 6 April 2026: if qualifying income was over £50,000 for the 2024 to 2025 tax year.
From 6 April 2027: if qualifying income was over £30,000 for the 2025 to 2026 tax year.
From 6 April 2028: if qualifying income was over £20,000 for the 2026 to 2027 tax year.

HMRC reviews Self Assessment returns and writes to people who need to start. Do not guess from turnover alone if your mix of income is complex. Use HMRC's checker and your accountant.

What a year under MTD looks like

GOV.UK's published timetable for those joining on 6 April 2026 (qualifying income £50,000+) includes quarterly update due dates such as 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027, with the Self Assessment return for the first MTD tax year due by 31 January 2028. People joining in April 2026 still file the 2025 to 2026 return in the usual way by 31 January 2027, because that year sits before MTD begins.

Always confirm the dates that apply to you on GOV.UK. Quarters can follow standard calendar update periods if you choose that alignment in software.

How to get ready

Check if you are in scope using GOV.UK guidance and your latest Self Assessment figures.

Talk to your accountant or tax agent about who will keep records, who will submit updates, and which software they support.

Choose compatible software early, not the week before the first quarterly deadline.

Clean your income and expense categories so quarterly totals are not a reconstruction job every three months.

Separate business and personal bank activity so digital records stay trustworthy.

Diary quarterly update dates and the January return date in the same place you track VAT or payroll.

Sign up when HMRC says you should, following the GOV.UK step-by-step collection for sole traders and landlords.

Quarterly updates are not extra tax bills

A common fear is that quarterly updates mean paying tax four times with four full returns. Published HMRC messaging is clearer than that: quarterly updates are summaries of income and expenses. You still work out and pay tax through the Self Assessment process on the usual timetable, unless your accountant advises a different payment arrangement for your case. See Self Assessment deadline UK for the classic January dates.

That still means your books need to be current every quarter. The pain shifts from one annual panic to a steady habit. If you already reconcile bank and books monthly, you are closer than someone who only opens the shoebox in January.

Cash, tax timing and readiness

Even when MTD for Income Tax does not apply to your limited company, the same discipline helps: know what is coming, keep records tidy, and do not discover tax cash needs late.

13-week cash flow forecasting explained covers putting tax dates on a forward cash view.
UK year-end accounts checklist covers the limited company accounts and corporation tax pack.
Cashwatch™ and YearReady™ are built to surface cash and year-end issues early, with professional sign-off for regulated work.

Quick MTD for Income Tax checklist

Confirm whether you are a sole trader, landlord, or both, and whether you are in Self Assessment.
Check your qualifying income against the £50,000 / £30,000 / £20,000 phases on GOV.UK.
Agree software and roles with your accountant.
Get digital records into a clean weekly or monthly habit before your start date.
Diary quarterly update deadlines and the January return.
Do not submit anything regulated without a qualified professional where your process requires one.

Authoritative sources

What to read next

This page is general information only. HMRC rules, thresholds and deadlines can change. Nothing here is regulated tax advice, and nothing regulated should be submitted without a human approval from a qualified professional. Always prefer the current GOV.UK guidance for your obligations.