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Making Tax Digital for Income Tax is now live – What next?


For landlords and sole traders bringing in qualifying annual income over £50,000 (not including dividends), Making Tax Digital (MTD) for Income Tax is now mandatory.

For income to qualify, it must be earned from self-employment or property rental, exceed the threshold in a tax year and be subject to UK Income Tax.

Please note that the total income is calculated before deducting expenses, tax or allowances.

Crossing the qualifying threshold of £50,000 in the 2024/2025 or 2025/2026 tax year will mean MTD obligations apply for the 2026/2027 tax year even if income has now decreased.

Important dates to remember

HMRC requires quarterly updates to be submitted one month after the end of each period.

For a standard tax year, the deadlines fall on:

  • 7 August
  • 7 November
  • 7 February
  • 7 May

How to stay compliant

To stay compliant, you should take each of the following steps:

  • Check your income level to see if you exceed the £50,000 threshold.
  • Choose which MTD compliant software to use.
  • Test your reporting processes to identify any potential issues and resolve them accordingly.
  • Submit quarterly updates of your income and expenses to HMRC.
  • Keep digital records.
  • Submit a final declaration by 31 January following the tax year end.

For landlords and sole traders whose qualifying income exceeds £30,000, you have another year to prepare for MTD, but it does not hurt to get started now to give yourself more time to adapt to the new requirements.

A further phase of MTD for Income Tax will take place in April 2028 for landlords and sole traders with qualifying income that exceeds £20,000.

If you are unsure whether you are affected by this first phase of MTD for Income Tax or have any questions about your compliance requirements, speak to our experts.

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