Making Tax Digital for Income Tax — what actually changes
Updated: 14/07/2026 · 7 min read
Making Tax Digital for Income Tax (MTD IT) replaces the single annual tax return with digital record-keeping and quarterly updates sent from compatible software. It starts on 6 April 2026 for sole traders and landlords whose combined qualifying income exceeds £50,000, extending to £30,000 from April 2027 — with a further step to £20,000 announced.
The timeline
- 6 April 2026 — qualifying income (self-employment + property, combined) over £50,000
- April 2027 — over £30,000
- A further extension to £20,000 has been announced for a later phase
- It is INCOME (turnover), not profit — easier to cross than people expect
What changes in practice
- Records of income and expenses must be kept digitally
- A quarterly update goes to HMRC from your software
- A final declaration replaces today’s tax return after year end
- Late submissions accrue penalty points that convert into fines
What does NOT change
- Tax payment deadlines stay as they are
- The amount of tax — MTD changes reporting, not rates
- The rules on what counts as an allowable expense
How to prepare without the panic
The habit that matters is capturing records digitally AS YOU GO — quarterly updates have to come from data already in a system, not from a carrier bag of receipts processed once a year. Photograph receipts or forward invoice emails on the day; the data is extracted, categorised and ready for the quarter.
If an accountant files for you, connect them to your documents online. A quarterly cycle with paper handovers is practically unworkable.
Every receipt captured, categorised and audit-ready.
Snap a photo or forward the email — Reclaim Day reads the vendor, amounts, VAT and date for you.
Start freeFrequently asked questions
When does MTD for Income Tax start?+
On 6 April 2026 for qualifying income over £50,000 a year, and from April 2027 for income over £30,000.
Will I pay tax quarterly under MTD?+
No — the quarterly submissions are summaries of income and expenses. Payment deadlines are unchanged.
Can I keep using a spreadsheet?+
Only with bridging software that connects it digitally to HMRC. Paper records will not be compliant.
I am below the threshold — should I care?+
Nothing changes for you yet, but the thresholds are stepping down. Building digital habits now makes the transition trivial later.
Related guides
This guide is general information, not tax advice. Rules and figures change — check gov.uk (HMRC) for current rates, and speak to an accountant about your situation.